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Despite the high inflation, the Reserve Bank of Australia (RBA) has kept the cash rate unchanged at 4.35% for the sixth consecutive time, providing relief to mortgage holders.

As forecast by economists, the RBA's Tuesday decision came a day after a global stock sell-off wiped trillions of dollars following news about the U.S. recession.

Though the board deliberated on a rate rise, it decided to keep the interest rate unchanged till its next meeting in September.

RBA Governor Michele Bullock warned against betting on a rate cut, adding that the panic sell-off after news about the U.S. recession was "a bit of an overreaction," The Guardian reported.

"The judgment of the board was that keeping the interest rate where it is and making sure that people understand that a rate cut is not on the agenda in the near term, given what we know that continued pressure will help to keep demand coming back into line with supply," Bullock said.

The RBA also acknowledged the loss of AU$160 billion worth of Australian shares, saying "globally, financial markets have been volatile of late and ... and geopolitical uncertainties remain elevated."

On Tuesday, the Australian dollar rose slightly to 65.15 US cents from 65 US cents, while stocks lost their initial gain of 0.5%.

The RBA expects inflation to fall within the 2%-3% target range by 2025, from its present rate of 3.8%.

In the Monetary Policy Decision statement, the board stated that its priority was to bring the inflation rate within the target range in a timeframe. The board's policy will be tough till it is certain that the inflation rate is steadily moving towards the target range. The board also stated it was monitoring global economies.

Pointing out that Australians do not need more pressure on their living expenses, Treasurer Jim Chalmers said, "Our economic plan is all about fighting inflation and easing cost of living pressures without smashing the economy. We're doing our bit to ease the pressure on Australians through our responsible budget strategy, tax cuts for every taxpayer and energy rebates for every household and a million small businesses."

Graham Cooke, head of consumer research at Finder, said mortgage holders were waiting desperately for a rate cut.

"Millions of Aussie borrowers are experiencing significant mortgage stress due to the fact that their monthly repayments have blown out so much and so rapidly. They're waiting with bated breath for any sign of relief from the RBA. The good news is our experts say there's a 56% chance of a rate cut in the next 12 months. The bad news is one in three say we will see a rate rise," 9News quoted Cooke, as saying.