RBA Cash Rate
Your destination for RBA news, expert forecasts and more
1.50%
Cash rate held
at 1.50% on Tuesday 1 May 2018
The Reserve Bank of Australia (RBA) sets the official cash rate target on the first Tuesday of every month except January. Below are expert forecasts from the finder.com.au Reserve Bank Survey™ of some of Australia's brightest minds in economics and property. You can also learn more about the RBA and how its decisions influence the interest rates banks charge, and learn about the best strategies for home owners and investors when there's a rate cut, hold or rise decision.
100% of the experts in our survey correctly predicted that the next cash rate move will be to hold. Enter our poll and let us know what you think will happen next month.
100%of our resident rate experts
correctly predicted the rate to hold at 1.50% on Tuesday 1 May 2018 View forecasts →
Next meeting: 2:30pm 5th June 2018
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RBA cash rate explained
The RBA meets on the first Tuesday of each month (except January) to decide on the official cash rate target - the rate offered on overnight loans to commercial banks. It can decide to keep the rate the same, raise it, or decrease it. Banks don't have to follow the moves the RBA makes (unless they offer tracker mortgages), but many will adjust their rates after a change.
RBA Forecasts
The finder Reserve Bank Survey™ is a monthly survey which asks some of Australia's most authoritative financial experts what move the RBA will make each month.
Make an informed decision when deciding to fix interest rates or lock your money into a term deposit by seeing what these experts predict will happen.
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Our resident rate experts
Find out what each of our experts predicts for next month and their detailed forecast explanations
Strong business conditions and employment, rising non-mining investment, strong global growth and the RBA's own forecasts argue against a cut but low inflation and wages growth, risks around the outlook for consumer spending, the slowing Sydney and Melbourne property markets and tightening bank lending standards argue against a hike. So the RBA is likely to remain on hold.
"Latest data remains neutral for the current setting environment with ABS March quarter CPI still clearly underwhelming. Predictable end to APRA market manipulation reflects generally moderated housing market activity so RBA can concentrate on main macro game.
Won't drop them - property prices flat - why move.
Too early to change. Waiting on data re wages and unemployment.
When the economy can better absorb the impact of an increase and inflation is at 2% or near that target level, Gov Lowe will lift the rate.
None of the data released since the last meeting, nor anything else that has occurred since then, will have altered the RBA's assessment of the economic outlook sufficiently to prompt a change in its view that current monetary policy settings are appropriate for the time being.
Reserve Bank of Australia governor Philip Lowe has warned the next shift in the official cash rate will be up rather than down, but there is no reason for this to occur until there is a pick up in economic growth and wages. Both of these are likely to be gradual so there is no case for any near-term change in policy.
Economy still mixed Household debt constraint
The economy is tracking along the RBA's own projections, however private demand is picking up only gradually and consequently inflationary pressures remain modest. Further strong labour market outcomes have not as yet prompted a discernible acceleration of broad-based wages growth that would underpin an inflationary pulse. The RBA has little cause to shift its policy stance as a result.
Economic growth and inflation still aren't strong enough to warrant higher interest rates.
The fundamentals do not yet justify a change.
The RBA knows that pressure from home price rises is beginning to stabilize, however, it's still too soon to move on the cash rate with so many borrowers heavily exposed to rising rates and inflation still low.
Inflation is low, the downtrend in unemployment appears to have stalled and the RBA is emphasising 'patience'.
The RBA will want to see inflation and wages improve and lower unemployment before making any changes.
Month on month no significant changes to require changes in policy rate.
Although momentum seems to be slowly building in the Australian economy, it still isn't at a point where interest rates will start to increase. We are now running at quite a different speed to large parts of the rest of the world - our time will come but it is taking lot longer than expected.
Unlike the “immediate” Trump fiscal stimulus the Australian Government is adopting a more structured, cautious approach.
No real inflationary pressures, strong jobs market.
Inflation and wages growth remain too soft to see any movement in the cash rate.
Muddle-through economy, inflation at low end of target band
The fundamentals have remained relatively static, meaning the RBA has no impetus to adjust interest rates at this time. There's a strong argument to leave the cash rate unchanged for the foreseeable future given stagnant house prices, the marked drop in investor lending and other macro challenges to the economy – especially when the banks cannot be trusted not to hike rates independently.
I agree with Kohler's assessment.
The RBA have signalled that they will keep rates at low levels for a while longer, but that the next move is likely to be upwards.
After the tepid March quarter CPI report and the ongoing slowdown in the housing market, the RBA can park monetary policy into 2019.
The RBA has explicitly stated that the next move is likely to be up, but given that spare capacity remains in the labour market, wage growth continues to be subdued and inflation pressure muted a hike is not likely to occur for some time.
The RBA will keep the cash rate steady at 1.50% at their next meeting. Inflation is soft, property prices are easing, and employment growth looks to be slowing down, so we are still of a view that the next move will be a cut, though this will take some time to come through.
Insufficient traction or momentum in the economy to consider any tightening for the year.
Nothing in the recent data to force them to adjust rates one way or the other. Still enough labour market slack to keep them from raising rates, and they've made it clear they would be very reluctant to ease at this point.
Even with unemployment reducing and the positiveness within the business sector, and the slowing of the housing market in many states I feel with the Royal Commission at is peak and the findings that have been released the Reserve Bank would be very courageous to increase interest rates at the present.
Read our coverage of recent announcements
RBA decisions
How the cash rate can impact your finances
See how the cash rate changes can affect your savings, term deposits, home loans and what you can do about it.
If the rate rises
Find an account which offers the same features and fees but with a better rate.
If the rate gets cut
Consider comparing a competitive term deposit rate so your interest earnings don't suffer.
If the rate holds
Carry out a quick comparison to make sure you're getting the best return on your money, see what promotions banks are offering.
If the rate rises
Ask your lender for a rate discount so that if rates do rise you won't be worse off, or alternatively, compare other variable or even fixed rate home loans to find a better deal.
If the rate gets cut
See how your lender responds to the cut. If they don't pass on the full rate cut, ask for a rate discount, and if you're still not happy start comparing what other deals are in the market. Some lenders have been known to pass on more than the official rate cut after an RBA announcement!
If the rate holds
Compare other variable rate home loans to make sure you're still getting the best deal. If rates are tipped to rise in the near future you may also want to compare fixed rates.
If the rate rises
Your rate won't rise as you locked it in, so you can relax a little. If your fixed rate is soon to end, start comparing what deals are being offered so you don't find yourself scrambling to lock in another rate.
If the rate gets cut
If you feel your home loan is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. If this figure is reasonable, you might want to consider comparing variable home loans. Use our switching costs calculator to see if you'd save.
If the rate holds
Because your rate is fixed for an agreed period of time, a decision by the RBA to hold won't have as much of an effect on you depending on how long you still have to go in your fixed term. As mentioned above, you might still want to monitor the other deals in the market to keep informed.
If the rate rises
If rates rise, savings accounts rates could be increased as well. If this happens, you might want to compare the rates of high interest savings accounts. Remember that most term deposits have interest penalties if you withdraw your funds early, so keep this in mind.
If the rate gets cut
Your rate won't change because it's locked in, but if you're nearing the end of your term start comparing both high interest savings accounts and term deposits to find a good deal.
If the rate holds
Compare accounts and ensure you're aware of what's being offered in the market.
History of the Reserve Bank of Australia official Cash Rate
The graph above shows the movement in the official cash rate target. A lower cash rate reduces the cost of borrowing money so more people are encouraged to borrow - stimulating the economy. Higher interest rates tend to encourage spending. This is how a rise or fall in rates affects the level of supply and demand and therefore the level of inflation - which the RBA wants to keep in the target range of 2%-3%.
Ask an Expert
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 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, please check out this link.
I hope this helps.
Have a great day!
Cheers,
Jeni
What do you think will be the next move for RBA on cash rate and when?
Thank you!
Hi Rob!
Thanks for the comment.
As of the moment, most of resident rate experts predict that rates will be the same. The cash rate target is released on the first Tuesday of every month except January.
You can follow the updated forecast right here.
Hope this helps.
Cheers,
Jonathan
Thanks Jonathan, I meant in the longer term, 6-12 months.
Hi Rob!
We appreciate your follow-up.
Currently, there are multiple factors that need to be considered and due to the volatility of these factors, it is a bit hard to conclude whether they’ll leave the rates unchanged for the next few months or not.
If you have further inquiries, you may contact:
Media and Communications
Secretary’s Department
Reserve Bank of Australia
SYDNEY
Phone: +61 2 9551 9720
Fax: +61 2 9551 8033
Email: rbainfo@rba.gov.au
Hope this helps.
Cheers,
Jonathan
When do you think the RBA will start raising rates?
Hi Julie,
Thank you for contacting finder.com.au we are a financial comparison website and general information service.
It is hard to predict the movement of the cash rate as it is based on a multitude of factors that are continually changing however 7 out of the 38 experts we surveyed in our latest RBA survey for September 2016 said they predict it will start going up in July 2017 or beyond.
Regards
Jodie
Hi Belinda
Appreciate if you would also send me informations regarding findings of monthly RBA survey.
Regards
Eric
Hi Eric,
Thanks for getting in touch.
On this page, you can view the RBA Cash Rate Target Announcements for each month from February 2015 until February 2016. You can also view the commentary of our resident rate experts in the lead up to each Board meeting which occurs on the first Tuesday of every month (except January).
Please feel free to sign up to receive our detailed RBA cash rate updates by completing the form provided above.
Regards,
Belinda
Hi,
My new house is ready now and wondering what is the best time to sell, should I put my house in the market now or January or wait for the February. I am not committed any where so I can wait.
Your advise needed.
Thanks
Hi Syed,
Thanks for your enquiry.
As finder.com.au is an online comparison service so we are not licensed to give you personal advice regarding the best time to sell your property.
You can read our guide here about considerations when selling your house.
All the best,
Belinda
hello.
i wonder if i could receive some information regarding not only the latest current economic situation, but also cash rate movements over the year.
Hi Dongho,
Thanks for your enquiry.
Above on this page you can view the ‘Reserve Bank monthly announcements’ to read about the cash rate movements and monetary policy decisions that have occurred over the course of this year. You can also sign up to receive our RBA cash rate updates by filling in the form provided above.
In regards to the current economic situation, finder.com.au is an online comparative website and we can’t comment on the activity of the broader Australian economy.
Thanks,
Belinda
Can you please send through the information on the RBA via email?
I’m doing a school Economic assignment on the RBA and financial markets
Hi Oli,
Thanks for your enquiry.
I’ve emailed you with some information regarding the findings from our monthly RBA survey.
Please note that on this page you can sign up to receive our RBA cash rate updates.
Thanks,
Belinda
Hi,
I was just wondering if I could have information regarding how interests rates will unfold over the next year. In particular, if the current interest rates will be appropriate for the economic conditions in Australia.
Thank you
Yazmin
Hi Yazmin,
Thanks for your enquiry.
Firstly, I’d like to point out that finder.com.au is an online comparison and general information service so we’re not in a position to forecast interest rates.
However, on this page you can sign up to receive our RBA cash rate updates which you might find useful.
Thanks,
Belinda
I also would like to know what the RBA is likely to do with interest rates over the next 12 months or at least material to allow me to make my own assessment please.
thank you
Jeff S
Hi Jeff,
I have emailed you the information we sent to others people who have asked us regarding the RBA.
Regards
Jodie