Australia's central bank holds cash rate at 4.35% and flags possible hike

Australia's central bank held its cash rate steady at 4.35 percent after its August policy meeting on Tuesday, matching expectations in Sydney. The Reserve Bank of Australia said the economy was slowing in the face of tighter financial conditions.

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The board warned that it might have to hike rates again if needed. It said it would do what was necessary to bring inflation back into its 2 percent to 3 percent target band.

The Reserve Bank said that could include increasing the cash rate target further if upside risks materialise. The statement gave no change to the current rate but signalled that policy remains open to further tightening if inflation pressures persist.

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