RBA leaves benchmark rate at 12yr high of 4.35
RBA reiterates it won39;t rule anything in or out on policy

SYDNEY, May 7 Reuters Australia39;s central bank held interest rates for a fourth straight meeting on Tuesday and noted challenges in getting inflation lower but hosed down expectations it would need to tighten policy again.

Wrapping up its twoday May policy meeting, the Reserve Bank of Australia RBA kept rates at a 12year high of 4.35.

However, it stopped short of reinstating a tightening bias that some economists had tipped after first quarter inflation and the labour market failed to cool as much as expected.

The less hawkish than expected statement sent the Australian dollar 0.3 lower to 0.6606, while threeyear bond futures rallied 7 ticks to 96.05. Markets have now trimmed bets of another hike this year with an implied probability of 16 for September from 43 before.

Recent data indicate that, while inflation is easing, it is doing so more slowly than previously expected and it remains high, said the RBA in a statement, adding that it would remain vigilant to upside risks.

The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.

The RBA dropped its explicit tightening bias in March and did not consider a hike as the economy slowed to a crawl and inflation looked to be on track to ease to its 23 target band in late 2025.

However, the…