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 CEO Paul Zahra said today’s rate decision will provide a hint of relief for retailers as economic challenges continue to dampen discretionary spending and consumer confidence.
“At a time of immense financial pressure and hardship for many Australians and retail businesses – avoiding another cash rate increase is critical to consumer confidence.
“March’s retail performance remained subdued, with cost-of-living pressures taking their toll on discretionary spending categories.
“Higher interest rates are a major factor in this spending slowdown. Whilst we haven’t seen an increase since November, higher mortgage repayments are taking a toll on household budgets.”
With May’s cash rate decision now in the books, the RBA will meet again mid-June.
“Retailers were initially optimistic for a cash rate cut in mid-2024 – which now appears less likely,” he said.
“Another cash rate increase would be punishing for both mortgage holders and discretionary retailers, with small businesses on thin margins being the most vulnerable.”
