The Reserve Bank of Australia kept its key interest rate unchanged on Tuesday, betting that rising unemployment and a cooling housing market will be enough to dampen economic activity and reduce inflation.

As widely anticipated, the central bank held the cash rate at 4.35% for the second consecutive policy meeting, with market watchers now turning their attention to Governor Michele Bullock's press conference scheduled for 3:30 PM in Sydney for further guidance.

The RBA's deviation from the midpoint of its 2-3% inflation target range is approaching five years. "The Board remains committed to ensuring that high inflation does not become entrenched," the bank stated in its post-meeting announcement. "Given that monetary policy is assessed to be somewhat restrictive, the Board will continue to take all necessary actions to ensure inflation returns to target sustainably, including raising the cash rate target further if upside risks materialize."

After a series of three consecutive rate hikes earlier this year, the central bank is now evaluating whether it can hold steady or if further tightening will be necessary. The ongoing stalemate in US-Iran negotiations remains a key uncertainty factor.