The official cash rate is 4.35%. 97% of Finder's economists and experts predicted the RBA's June decision to hold the cash rate.
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Key takeaways
The official cash rate is 4.35%. The Reserve Bank decided to hold the cash rate at its June meeting.
97% of Finder's experts correctly predicted today's decisions.
The Reserve Bank meets again on 11 August 2026 to set the benchmark interest rate.
These graphs show movements in the official cash rate over time and changes to the market's lowest home loan rates over the same period. You can see how the market responds by raising or lowering rates broadly in line with the RBA's decisions.
How often are Finder's expert predictions correct?
The latest cash rate analysis from the experts
Finder regularly surveys 40+ economists and property experts to forecast the RBA's next cash rate decision and get insights into the future of the Australian economy. Here are the most recent cash rate predictions.
The Reserve Bank is likely to leave interest rates unchanged at its August meeting because the available economic data suggest that inflationary pressures are gradually easing, even though inflation remains higher than the Bank would like. While employment levels remain relatively strong, household spending has slowed considerably as higher mortgage repayments and living costs continue to place pressure on family budgets. At the same time, previous increases in interest rates are still working their way through the economy, meaning that the full impact of earlier decisions has not yet been felt. The recent increase in oil and fuel prices is certainly a concern because higher transport and energy costs can eventually flow through to the prices of goods and services. However, the Reserve Bank is likely to view this as an external shock rather than a sign that inflation is becoming permanently embedded in the economy. The Board will also be conscious that increasing rates too aggressively carries risks of its own, including weaker economic growth, higher unemployment and increased financial pressure on households and businesses. Taken together, the evidence suggests that the Reserve Bank is more likely to adopt a cautious approach, leaving rates unchanged while continuing to monitor inflation, employment and consumer spending over the coming months. Looking further ahead, the most likely scenario is that interest rates remain unchanged for another few months while the Reserve Bank assesses the effect of higher fuel prices and monitors inflation data. If inflation continues to fall and economic growth remains subdued, the discussion will probably shift from whether rates should rise further to when rates might eventually begin to fall. On the other hand, if oil prices continue to rise, unemployment remains low and wage growth strengthens, the Reserve Bank could decide that another increase is necessary later in the year. At present, however, a prolonged period of stable interest rates appears to be the most likely outcome.
Although inflation remains 'too high', the 'underlying' inflation rate over the year to the June quarter (of 3.5%) was sufficiently below the RBA's own most recent forecast for it, in combination with clear signs of an easing in the housing market, to remain 'on hold' for the time being - given its judgement that with the cash rate at 4.35% monetary policy settings are now 'restrictive'.
I expect the RBA to hold the cash rate at 4.35%. The June quarter inflation data came in below expectations, with both headline and trimmed mean inflation easing. While inflation remains above target and the labour market is still relatively tight, the latest data suggest underlying inflationary pressures are gradually moderating. Given the cumulative tightening already in place, the Board is likely to wait for additional evidence before considering any further policy action.
The RBA will maintain a wait-and-see approach to policy but will likely emphasise vigilance about inflation and adopted marginally more hawkish language after signs of labour market resilience in last month's labour force data.
The latest inflation numbers came in a bit lower than expected, the labour market appears to be gradually softening and the housing market is weakening. Consequently, I think the RBA is likely to keep the cash rate on hold in August.
The Bank is likely to hold this month. The latest labour market data showed slow growth in full time employment, and historically this has heralded lower inflation. The latest inflation data suggested overall a slight easing of inflationary pressures. The Bank will also consider the pronounced weakening of house prices, even though that is theoretically supposed be outside its new remit.
Inflation remains high, but the latest data suggests it is beginning to moderate, while the labour market is still tight but showing some early signs of softening. The three recent rate hikes are already flowing through to the property market and, when combined with tax policy changes, are weighing on buyer demand, borrowing capacity and price growth.
It's a line ball call, but with fuel prices going up, construction costs still on the rise, and the war in Iran still uncertain, I think the RBA will opt for one more rise. Another factor is that here have been reports this week that consumer spending is still strong.
The RBA can take another breather this month keeping the Official Cash Rate at 4.35% after the latest CPI data saw a levelling off in underlying inflation, but will maintain their tightening bias until core CPI is back below 3% (which might not be until late into 2027). The risk of one more hike hasn't changed.
With the downward trend shown by the latest CPI figures, the RBA board could now leave the cash rate on hold. Keeping in mind that the CPI is still above their target band, we will have to wait and see if the inflation slowdown continues.
Inflation data weaker than expected but employment numbers still elevated. There is no case to cut currently - at least until we see inflation back within acceptable range or signs of stress in the economy with increased unemployment.
Annual headline inflation has fallen for the third consecutive month to 3.8% in June, taking pressure off the RBA to issue a fourth rate hike this year at a time when the average Australian is struggling with the cost of living. However, core inflation is not making as much progress and is likely to remain a concern for the RBA.
The RBA is evidently committed to returning underlying inflation to the midpoint of its 2–3% target range, and this is supported by the relatively well-anchored trend in longer-run inflation expectations among firms and households. The latest CPI figures were slightly weaker than the RBA’s May forecasts, moving inflation marginally in the right direction, although this was partly driven by volatile components such as oil and transport costs. Given the heightened uncertainty, both globally and domestically — particularly around the outlook for house prices and household demand — I think the RBA is likely to adopt a wait-and-see approach. Having already raised the cash rate three times this year, it will want to assess whether the cumulative effect of those increases is sufficient to bring underlying inflation back to target before tightening policy further. I expect the Board to hold the cash rate steady at its August meeting.
Slightly softer than expected June quarter underlying inflation along with slightly weaker than expected labour and housing market conditions should allow the RBA to remain in “wait and see” mode this month and so remain on hold. But with inflation remaining way too the RBA is likely to retain a tightening bias.
The case to hold rates steady is reinforced by weaker-than-expected inflation figures. It is also important for consumers, businesses, the property market and the economy generally. The impact of higher petrol prices is effectively a doubling down of the impact of the rate rises from earlier in the year, as consumers rein in spending elsewhere.
Only someone who lives under a rock wouldn’t be aware of the effects of the three interest rate hikes so far this year washing through the economy. They’ve slowed the housing market - particularly at the Top End of Town - and generally making life harder for Aussies with a mortgage in a cost of living crisis. Inflation is also less that the RBA itself predicted. A rate rise in August would be a cruel blow.
Underlying inflation - the RBA preferred inflation measure - remains stubbornly at the highest level since July 2024 and well above the RBA target range. Although international oil prices are now more likely to remain below the previous peaks of 2024, the removal of the governments recent fuel subsidy has sharply increased fuel costs at the bowser which will add to inflation. With continuing surging electricity prices, higher home rental growth and house building costs, the RBA is now clealrly more likely to raise rates.
The latest CPI data published by the Australian Bureau of Statistics showed that headline inflation has now fallen two consecutive months. I expect this should give the RBA enough reason to take a pause and keep the cash rate on hold in August.
There are a couple ofthings to consider, one is the negative reaction to the May Federal budget. This has certainy changed the how both indviduals and businesses are looking at the future. The otherpoint to consider is that over the 12 months to 30 June CPI eased slightly and so the RBA will most likely want to see if this continues.
Inflation is still too high, but the economy is showing signs of a slowdown, including weak GDP growth, upward trend in unemployment rate, and increasing underemployment. The RBA can afford to wait for more evidence rather than risk weakening the economy and labour market more than necessary.
August's trimmed mean CPI came in at 3.60 % instead of the anticipated 3.80 %, and unemployment rose slightly in Q2 to 4.40 %, so there is some evidence for easing in the domestic economy, and there may be enough for the RBA to pause.
Inflation has moderated and although it remains too high, I think that after three rate increases alreasy this year the RBA will feel like they have time to wait and see the impact of those rate increases.
The RBA will hold the rate in August because recent inflation data came in cooler than anticipated. We were bracing for price increases, but instead saw a dip, partially driven by housing costs. As this trend is likely to continue, the likelihood of a hike for the next few months has dissipated.
Trimmed mean inflation printed below the RBA's expectations in Q2. When considered alongside the higher than expected unemployment rate (relative to their forecasts), we think this gives the RBA space to see how the economy will evolve from here.
This is a lineball decision. Despite stronger jobs and spending data we think the lower-than-expected inflation data gives the RBA more time to analyse the impact of its 3 rate rises and the tax changes
With recent inflation data coming in just below forecasts, the RBA has breathing room to evaluate how external factors will impact the economy. We are seeing house prices cool as lending has become restricted following the previous cash rate increases and so I believe the Board may take a cautious approach to avoid further downturn.
A strong labour market, ongoing high inflation and risks of rising inflation expectations due to the Middle East conflict will mean the RBA will maintain a hiking bias, but rates will likely remain on hold until later in 2026.
Despite inflation remaining above target and labour market conditions staying tight, the RBA is likely to keep the cash rate unchanged in August. Heightened global economic uncertainty, stemming from geopolitical tensions, potential AI-related disruptions, and climate-related challenges in Europe, could weaken Australia's economic outlook, increase supply-side cost pressures, and contribute to a gradual easing of labour market conditions. These risks are likely to support a more cautious monetary policy stance.
The Reserve Bank of Australia sets the official cash rate target. This is a benchmark rate that has a big impact on home loan interest rates, savings accounts and other credit products.
What is the official cash rate?
One of the Reserve Bank's primary roles is setting monetary policy for the Australian economy. This involves setting the cash rate (or to use its full name, the official cash rate target).
At a technical level, the cash rate is actually the interest rate banks pay for borrowing money from each other overnight. Banks use this to manage liquidity and issue funds as needed.
Australian banks can borrow and deposit money with the RBA at just below the current cash rate target.
How the official cash rate target affects interest rates
But for the average Australian consumer, the cash rate is really useful as a broad benchmark for the interest rates on home loans and savings accounts. A high cash rate makes borrowing money more expensive and sees home loan repayments rise.
A low cash rate makes it cheaper to borrow money. This boosts borrowing and spending.
How has the cash rate changed over time?
The Reserve Bank adjusts the official cash rate target over time in response to various economic data, including:
Inflation
The unemployment rate
Global economic factors
The cash rate stayed at the then record low of 1.50% from 2016 to 2019, when the RBA lowered it further in response to low inflation and slightly higher unemployment.
Then as the Covid-19 pandemic began to hurt the Australian economy the RBA dropped the cash rate even further. This was to make borrowing cheaper and stimulate a struggling economy. The cash rate hit the record low of 0.10% during this time.
Over the last few years the RBA has lifted the cash rate very quickly to combat inflation, with a few cuts in between.
How does the RBA's cash rate decisions affect your finances?
The RBA can do 3 things with the cash rate: Raise, lower or hold the cash rate at its current level.
If the RBA lifts the cash rate
When the cash rate rises, most lenders pass on the rate rise to borrowers on variable rate home loans.
If the cash rate rises by 25 basis points, then most borrowers will see 25 basis points added to their home loan's interest rate.
If you have a fixed rate home loan nothing changes. Your rate is locked in for the duration of the fixed period.
When the RBA lowers the cash rate, most lenders pass on some if not all of the cut to borrowers on variable rate home loans.
Banks also lower rates on savings accounts and other products.
If you have a home loan, it's a good idea to check if your lender has actually passed on the rate cut to you. If it hasn't, you may need to switch.
If the RBA holds the cash rate
A hold decision means the cash rate isn't changing this month. This means that your home loan or savings account rate likely won't change. You don't really have to do anything.
But banks and lenders change interest rates all the time for various reasons even if the RBA doesn't move the cash rate.
Calculate how much a cash rate cut will impact your home loan repayments
Enter your loan amount, current interest rate and the latest cash rate change to quickly estimate how much your monthly repayments will change, and what your new repayment will be.
Example: how changes to the cash rate can change your loan repayments
You have a $600,000 home loan with a variable interest rate of 6.00%. It's a 30-year loan term with principal-and-interest repayments.
Your monthly repayments are $3,598.
⬆️ If the cash rate rises by 25 basis points your interest rate would increase to 6.25%. Your monthly repayments would now be $3,695. This would cost you an extra $97 a month or $1,164 a year.
⬇️ If the cash rate decreases by 25 basis points your interest rate would fall to 5.75%. Your monthly repayments would now be $3,502. This would save you $96 a month or $1,152 a year.
More questions about the RBA cash rate
Lenders are free to change interest rates on their products whenever they want. The cash rate is a big influence on rates, but there are many other factors. This includes a lender's own funding costs, the amount of deposits the lender has and how competitive it wants to be to attract new customers.
The RBA changes the cash rate target based on a range of factors including inflation, the performance of the Aussie dollar, unemployment, the housing market, and Australia's Gross Domestic Product (GDP).
For example, if inflation rises above the target rate it means that Australians are spending their money too freely and prices are increasing too rapidly. But if the RBA raises interest rates to make it more expensive to borrow money, the economy will settle and price increases will slow down.
Conversely, the RBA will drop interest rates if inflation is too low and the economy is stagnating, encouraging more Australians to spend more money and stimulate economic growth.
The Reserve Bank of Australia is the country's central bank. The RBA's monetary policy has three key objectives which are set out in the Reserve Bank Act 1959:
The stability of the currency of Australia.
The maintenance of full employment in Australia.
The economic prosperity and welfare of the people of Australia.
Setting the official cash rate is one of the bank's key tools to influence monetary policy, inflation and the broader Australian economy. The bank's board meets on the first Tuesday of every month except January to set the cash rate. The RBA will either cut, raise or hold the cash rate.
The RBA's board of governors meets 8 times a year, in February, March, May, June, August, September, November and December. It is here that the board makes a decision on the official cash rate target.
The board used to meet 11 times a year, on every first Tuesday of the month apart from January. It lessened the number of times it meets to provide more time for change between meetings.
However, the RBA can alter the cash rate at any time outside of the meetings. This is rare, but can happen. In March 2020, in response to the onset of the COVID pandemic, the bank cut the cash rate twice. Once at the scheduled meeting and then again mid-month at a special emergency meeting.
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
CuteyJune 16, 2022
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Finder
RichardJune 18, 2022Finder
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
octoJune 18, 2018
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
NikkiJune 20, 2018
Hi Octo!
Thanks for getting in touch!
To know more information on your questions, you can fill in your email address in the box provided and you’ll be updated on RBA’s decisions on the official cash rate target.
While we provide you with general information, please know that we don’t stand as a representation for RBA or any company featured on our site.
Hope that clarifies!
Cheers,
Nikki
TaneeshaMay 24, 2018
Do you think the cash rate will stay the same at the June RBA meeting?
Finder
JoshuaMay 24, 2018Finder
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
BrookMay 5, 2018
What do you think that how the international economic condition influence the cash rate?
Finder
JeniMay 6, 2018Finder
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
A rate cut appears imminent, and not just one, according to a new poll from Finder.
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when will rates increase
Hi Mark,
At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
Hi Octo!
Thanks for getting in touch!
To know more information on your questions, you can fill in your email address in the box provided and you’ll be updated on RBA’s decisions on the official cash rate target.
While we provide you with general information, please know that we don’t stand as a representation for RBA or any company featured on our site.
Hope that clarifies!
Cheers,
Nikki
Do you think the cash rate will stay the same at the June RBA meeting?
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
– Household debt
– Inflation
– Wage growth
– Consumer Confidence Index
– Unemployment
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
What do you think that how the international economic condition influence the cash rate?
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
I hope this helps.
Have a great day!
Cheers,
Jeni