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The Reserve Bank of Australia (RBA) left the cash rate target on hold at 4.35 percent on Tuesday as inflation is still some way above the midpoint of the 2-3 per cent target range. 

The RBA board said in a statement that it decided to leave the cash rate target unchanged at 4.35 per cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25 per cent.

Inflation has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance, the RBA board said, adding that however, inflation is still some way above the midpoint of the 2-3 per cent target range, Xinhua news agency reported.

In underlying terms, as represented by the trimmed mean, the consumer price index (CPI) rose by 3.9 per cent over the year to the June quarter, according to the statement.

The economic outlook is uncertain and recent data have demonstrated that the process of returning inflation to target has been slow and bumpy, the RBA board said.

"Returning inflation to target within a reasonable timeframe remains the Board's highest priority," it said.