Australia’s peak retail body, the Australian Retailers Association (ARA), has welcomed the Reserve Bank of Australia’s (RBA) decision today to again hold cash rates at 4.35% following subdued retail trade data.
ARA Chief Industry Affairs Officer Fleur Brown said retailers continue to battle the dual headwinds of a spending downturn coupled with high costs of doing business.
“Whilst interest rates have remained on hold since November, most Australian household budgets remain under significant pressure,” Ms Brown said.
“April’s retail sales continued to soften, with most discretionary categories remaining in decline – making it all the more important to avoid another cash rate increase.
“Changes to interest rates typically have a lag effect on sales and we’re still experiencing the impacts of interest rate increases last year,” she said.
With June’s cash rate decision now in the books, the RBA will meet again early August.
Retailers are hopeful an interest rate reduction may be on the horizon, after the Bank of Canada and the European Central Bank recently cut interest rates for the first time since the pandemic.