The Reserve Bank of Australia (RBA) announced on Tuesday (Mar. 19) that it would keep its interest rates at 4.35% for the third consecutive meeting of its board.

According to its statement, it has also kept its exchange settlement balance rate at 4.25%.

"Recent information suggests that inflation continues to moderate, in line with the RBA's latest forecasts," the RBA said in a statement.

"Services inflation remains elevated, and is moderating at a more gradual pace. The data are consistent with continuing excess demand in the economy and strong domestic cost pressures, both for labor and non-labor inputs."

The decision came after the Bank of Japan announced earlier on Tuesday that it would end its negative interest rate policy and raise borrowing rates from -0.1% to 0%.

The RBA added, "While there are encouraging signs that inflation is moderating, the economic outlook remains uncertain," and that the "Board needs to be confident that inflation is moving sustainably towards the target range."

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ABC reported that the central bank's forecasts were for inflation to return to the target range of 2 to 3 percent in 2025 and to the midpoint in 2026.

"The Board expects that it will be some time yet before inflation is sustainably in the target range," the RBA added. "The path of interest rates that will best ensure that inflation returns to target in a reasonable time frame remains uncertain and the Board is not ruling anything in or out."

During a press conference, RBA governor Michele Bullock downplayed what some economists see as less hawkish language in its latest statement on monetary policy.

"We have changed the language - that's true," she told reporters. "But that was in response to some data, which has demonstrated to us that we are still broadly on the path we ... thought we were on."

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