RBA Cash Rate
Your destination for RBA news, expert forecasts and more
1.50%
Cash rate to hold
at 1.50% on Tuesday 4th October 2016
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 read more about the RBA and get general advice about what to do in the event of a rate cut, hold or rise decision.
33% of experts in our survey suggest that rates may dip lower than 1.5% before the end of the year with 24% expecting it to fall in November. Enter our poll and let us know what you think will happen.
LATEST: Which banks passed on the August 2016 RBA interest rate cut?
100%of our resident rate experts
have forecast the rate to hold at 1.50% on Tuesday 4th October 2016
Announcements
Read about the latest RBA announcements and find out if it's time to carry out a fresh comparison of your financial products to get the best deal.
RBA Cash Rate Explained
The RBA meets on the first Tuesday of each month to decide on the official cash rate target - the rate offered on overnight loans to commercial banks. They can decide to keep the rate the same, raise it, or decrease it.
Find out how this rate can affect the interest rate you're charged/receive on a loan, credit card or savings account.
RBA Forecasts
The finder Reserve Bank Survey™ is a monthly survey which asks some of Australia's most authoritative financial experts what they think the RBA will decide to do 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 think will happen.
Find out the RBA decision when it's announced
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Our resident rate experts
Find out what each of our experts predicts for next month and their detailed forecast explanations
Garry Shilson Josling
Forecast: Down in May, 2017
+ Read Garry's full forecast
September
No change
October
No change
For the RBA, it's a matter of 'so far, so good'. And there [is] obviously increasing scepticism at the RBA of the effectiveness of further cuts: if there's a problem, it's not that interest rates are too high.
Jordan Eliseo
Forecast: Down in December, 2016
+ Read Jordan's full forecast
September
No change
October
No change
We don't think the changing of the guard at the RBA alters in anyway the future path of monetary policy, but the board will be happy to sit tight for now, and monitor incoming data before making a cut in either late 2016 or Q1 2017.
Shane Oliver
Forecast: Down in November, 2016
+ Read Shane's full forecast
September
No change
October
No change
Not enough has changed since the last rate cut in August and the RBA is likely waiting until the September quarter CPI release prior to the November meeting before deciding to move again.
Darryl Gobbett
Forecast: Down in November, 2016
+ Read Darryl's full forecast
September
No change
October
No change
Easing trend still in place with inflation expected to go lower and $A higher than desired but cuts to come in a considered fashion.
Richard Robinson
Forecast: Down in July, 2017 or beyond
+ Read Kishti's full forecast
September
No change
October
No change
No need to cut rates when unemployment rate steady and economic growth currently sufficient to keep it steady. Plus RBA needs to let [the] housing market cool further.
Michael Blythe
Forecast: Down in November, 2016
+ Read Michael's full forecast
September
No change
October
No change
[The RBA are] waiting for Q3 CPI data at the end of October.
RBA comfortable on the sidelines. Waiting on further data to see how the economy is tracking and also next round of inflation data.
Andrew Wilson
Forecast: Down in May, 2017
+ Read Andrew's full forecast
September
No change
October
No change
Wait and see impact following recent cuts – also awaiting September quarter inflation data out next month. Will be also alert to recent sharp house price increases in Sydney and Melbourne.
Recent RBA commentary suggests that rates will remain low but not necessarily go lower. There is no new data to warrant a further rate cut.
Mark Brimble
Forecast: Down in December, 2016
+ Read Mark's full forecast
September
No change
October
No change
Bias remains to rate reduction, however the new RBA board will likely want to hold for a few months given the raft of factors in play at the moment.
The RBA will wait to see how the May and August rate cuts will impact on inflation before it considers moving the cash rate again.
Economic growth is moving in the right direction. The RBA will wait and see how August's rate cut works before another is made.
Alex Joiner
Forecast: Up beyond October, 2017
+ Read Alex's full forecast
September
No change
October
No change
There is no catalyst in the data flow domestically or the environment globally that warrants any move.
The RBA will hold rates at 1.5% and wait for further signs of change before cutting rates again. The effectiveness of monetary policy to stimulate inflation and broader economic activity is diminishing, so we won't see a rate cut in October, rather we will see growing consensus that the way forward is through fiscal policy measures, such as investment in public infrastructure.
Michael Witts
Forecast: Up beyond October, 2017
+ Read Michael's full forecast
September
No change
October
No change
No significant further information [has been] released to allow the [RBA] to consider a change in the cash rate.
Leanne Pilkington
Forecast: Down in April, 2017
+ Read Leanne's full forecast
September
No change
October
No change
In the past week alone there’s been reports that the housing market is cooling, and another ranking Sydney among the most at risk globally in terms of a housing bubble. The reality is much less dramatic and we believe leaving interest rates unchanged is the most appropriate course.
Lynne Jordan
Forecast: Down in February, 2017
+ Read Lynne's full forecast
September
No change
October
No change
As the RBA holds the official cash rate again this month the public should turn to the government and ask what other form of stimulation can kick start the economy. Whether that is investment in infrastructure, the public sector or incentives for the private sector – the economy needs something more than another rate cut to pick up. Despite the fact that unemployment is at a three year low, and commodity prices are still showing signs of improving, another rate cut will still happen – likely at the start of 2017.
Stephen Koukoulas
Forecast: Down in November, 2016
+ Read Stephen's full forecast
September
No change
October
No change
Rates already stimulatory and recent data have been generally fair. No urgent need to adjust rates.
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Michael Yardney
Forecast: Down in April, 2017
+ Read Micahel's full forecast
September
No change
October
No change
Interest rates are likely to remain on hold, with our housing markets easing and economic growth remaining in line with expectations.
Emily Dabbs
Forecast: Down in November, 2016
+ Read Emily's full forecast
September
No change
October
No change
The central bank will likely wait to see how inflation responded to monetary easing earlier in the year before making any decision to ease further.
Chris Schade
Forecast: Up beyond October, 2017
+ Read Chris' full forecast
September
N/A
October
No change
The most likely scenario seems to be one where the RBA remains on hold for at least the remainder of 2016 as it waits for further information around domestic and global developments. The domestic economy is performing in line with expectations, and an anticipated US rate hike in December should help take some heat out of the Australian Dollar. There does not appear to be a compelling reason for further monetary easing at this point.
RBA still looking at the results of recent changes to rates. [The] focus is on low inflation not growth.
Jonathan Chancellor
Forecast: Down in November, 2016
+ Read Jonathan's full forecast
September
No change
October
No change
There's no prospect the new RBA Governor would make any move at his first meeting in the role.
Matthew Peter
Forecast: Down in February, 2017
+ Read Matthew's full forecast
September
No change
October
No change
With markets taking the US Fed and Bank of Japan decisions in their stride, the RBA will now remain on hold for the rest of 2016. In the new year, it must weigh up developments in domestic inflation and the exchange in its decision to stay on hold or whether to cut again by 25bps.
Noel Whittaker
Forecast: Down in February, 2017
+ Read Noel's full forecast
September
No change
October
No change
The incoming Governor has just stated that dropping rates anymore may be pointless.
Angus Raine
Forecast: Down in December, 2016
+ Read Angus' full forecast
September
No change
October
No change
[The rate] will most probably lower before Christmas.
RBA is still evaluating the impact of last two rate cuts in May and August.
Christine Williams
Forecast: Down in November, 2016
+ Read Christine's full forecast
September
No change
October
No change
The retail sector has had a boost in spending and the unemployment rate has had a slight reduction.
Janu Chan
Forecast: Down in November, 2016
+ Read Janu's full forecast
September
No change
October
No change
The RBA has just lowered the cash rate in May and August, and will take a bit more time before moving again. Recent commentary is also suggesting that the RBA is not in a hurry to move rates and it would be likely to wait until key CPI data released in late October.
Steven Milch
Forecast: Up beyond October, 2017
+ Read Steven's full forecast
September
No change
October
No change
No clear evidence that growth or inflation are undershooting latest RBA forecasts.
Brian Parker
Forecast: Up beyond October, 2017
+ Read Brian's full forecast
September
No change
October
No change
No new news on inflation or wages since last rate cut, and RBA has signalled it's happy with the cash rate where it is.
The economy is growing at around trend. While inflation is lower than optimal, it is still consistent with a target band of 2% to 3% ‘over time’.
N/A
Other experts on the panel
Melissa Browne
September
N/A
October
N/A
I don't believe there's a case to cut rates at present and certainly no reason to move them upwards.
John Hewson
September
No change
October
N/A
[The RBA are in] wait and see mode.
Warren Hogan
September
N/A
October
N/A
The Reserve Bank has said that they aren't going to be doing anything with the cash rate. They are sitting on their hands. I don't think they will do anything for six months, however things can change.
Peter Munckton
September
No change
October
N/A
The RBA has the cash rate at the right level.
Scott Pape
September
N/A
October
N/A
The cuts are coming… just not this month.
David Bassanese
September
N/A
October
N/A
Annual underlying inflation has been confirmed as running 0.5% lower than the RBA expected 6 months ago.
Chris Caton
September
N/A
October
N/A
There's another cut out there, and July can't be ruled out, but the RBA would probably prefer to wait for more evidence on inflation.
Paul Ryan
September
N/A
October
N/A
I don't see any reason why the Reserve Bank will vary the position they have held over the past 12 months. I think there would be a level of concern about lenders moving rates outside their own decision so it might be best to keep the cash rate as is.
James Bond
September
N/A
October
N/A
The RBA rarely makes one move in isolation, running a campaign of several cuts or rises. This time will be no different. The weak labour force data for January has only added more to the case for a cut.
Jason Spencer
September
N/A
October
N/A
There is no significant weakening in the Australian economy to justify a drop at this time.
Paul Bloxham
September
N/A
October
N/A
Inflation is too low.
Nicholas Gruen
September
No change
October
N/A
Because they are flying by the seat of their pants, and given the recent cut they won't want to do it again too soon.
September
No change
October
No change
Concerns another decrease could drive house prices up further.
Peter Jones
September
N/A
October
N/A
There is sufficient stimulus.
Lisa Montgomery
September
N/A
October
N/A
There is plenty for the RBA to consider as it approaches this meeting, including a steadily rising Australian Dollar, the May budget and looming Federal election. The decision, however, will be to leave the cash rate on hold.
James McIntyre
September
N/A
October
N/A
The Reserve Bank Board will have no new, substantive information on the economy compared to their March meeting, where the decision was taken to remain on hold.
Concerns about financial stability are likely to keep the Reserve Bank sidelined… However, if the currency remains elevated, or pushes beyond US$0.78, we think there is a substantive risk the Reserve Bank cuts in May.
John Caelli
September
N/A
October
N/A
Employment data remains soft and inflation remains well below the 2-3% desired band. The Australian dollar is also stronger than what the RBA would like.
Mark Crosby
September
No change
October
N/A
With the Fed [Federal Reserve] considering raising there is no reason for the RBA to cut given recent cuts to the cash rate haven't had time to feed through to inflation.
Jessica Darnbrough
September
No change
October
N/A
Given that the Reserve Bank cut the cash rate last month, I think they will take a wait and see approach in September. The RBA will be keen to see what impact last month's rate cut will have on the property market as well as the broader economy before making any further adjustments to the current monetary policy setting.
Ken Sayer
September
N/A
October
N/A
We expect a drop in Sep 2016.
Paul Clitheroe
September
N/A
October
N/A
It’s a curate’s egg. The economy is not all bad… Global volatility makes predicting a dangerous sport.
Effie Zahos
September
N/A
October
N/A
The next inflation report isn't due until July 27 so it could be a case of hold steady until August.
Peter Boehm
September
N/A
October
N/A
No compelling reason to move rates just yet - I think by the middle of the year we'll have a better line of sight of possible rate movements.
Zoe Pointon
September
N/A
October
N/A
Uncertainty in the equity markets and slowing property price growth.
Linda Janice Phillips
September
N/A
October
N/A
The Reserve Bank must be comfortable with the exchange rate around US$0.71. House price rises in Sydney are slowing, which will be regarded as welcome, but growth is accelerating in Melbourne. While the global outlook is uncertain, it is expected that the Fed will soon start increasing US rates, which will limit the capacity for the Reserve Bank to move on the downside. Some domestic indicators such as unemployment are improving, and the Reserve Bank is reporting a somewhat better outlook. While the markets would like to see rates fall 25bp to offset the mortgage price hikes by the banks last month, on the whole it is likely that the Reserve Bank will be comfortable in waiting until February before making any decision to change rates… The level of volatility in global markets, problems of debt management in developing countries, the threat of expansion of the wars against IS, and uncertainty within the Euro-zone, the latest concern being Portugal, have the potential to upset the base case outlook of a slow but steady improvement in the economy. The risk of "black swan events" is rising, and volatility is likely to remain high.
Nathan McMullen
September
N/A
October
N/A
RBA likely to review Q2 inflation data due late July before revisiting changes to the cash rate.
Angelo Malizis
September
N/A
October
N/A
No economic reason to move at this stage.
David Scutt
September
N/A
October
N/A
It still remains a matter of when, not if, the Reserve Bank will ease policy further. Outside of established residential and commercial property, primarily on the east coast, the domestic economy requires further stimulus. It'll be a line-ball decision as to whether or not they ease but history, along with recent auction clearance rates in Sydney, may see them hold off until May. Either way I expect a cut in one of the next two meetings along with a continuation of their easing bias.”
Gavin Smith
September
N/A
October
N/A
Comments from RBA Governor, Glenn Stevens indicated that the cash rate would remain at current levels for an extended period of time.
Peter Switzer
September
N/A
October
N/A
A rate cut is what they should do but I would not be surprised if they hold. There is a too cautious approach at the Reserve Bank which is holding back growth
Scott Haslem
September
No change
October
N/A
We believe now accommodative policy at a 1.5% cash rate, firm growth data, a likely trend lower in the AUD and concern about financial stability will see the RBA on-hold at 1.5% for the foreseeable future. While inflation will remain low, core inflation is likely to drift modestly higher from here.
Neville Norman
September
N/A
October
N/A
The market is currently a ‘catch 22'… There has been a high level of unsatisfied young house buyers at continued absurdly low interest rates.
Read our coverage of recent RBA announcements
How the cash rate will impact on 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 tends to subsequently 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%.
What is the Reserve Bank of Australia and what is the cash rate target?
The Reserve Bank of Australia (RBA) is the government body that implements monetary policy by setting the Australian cash rate, announced on the first Tuesday of the month. Although the Reserve Bank is government-funded, it is independent of party politics, and has free rein to make its rates decisions without any political influence. The official cash rate is watched by many people, but none more closely than the nation's top economists.
When the RBA decides the appropriate cash rate, its primary aim is to keep inflation to a stable level of two to three per cent. When inflation is moderated in this way, it keeps the value of the Australian dollar stable and supports long-term growth in the economy, with a view to keeping a high employment rate. The RBA announcement of the cash rate each month is watched closely by the media and home-owners because it is one of the key factors that determine the interest rates set by banks for their home loans. While banks' lending rates have historically risen and fallen in line with changes in the RBA's cash rate announcement, in recent years the banks have been criticised for not following the RBA's lead.
The interest charged by banks can have a huge impact on the bottom line of a household budget because of the size of their mortgage repayments, so it's useful to understand how the banks decide on the rate that they set.
The interest payment charged by the bank is made up of the cash rate, a risk premium for individual borrowers and a profit margin. In addition to this, there has been an extra factor charged since the global financial crisis because of the reduction in readily accessible cash. The classic supply-demand conundrum has driven up the cost of global inter-bank lending – meaning there is less supply of cash so it has become more expensive – so banks are passing on this cost to consumers by charging higher interest rates.
It's important for home owners to keep an eye on their lender and know they have the power to vote with their feet: if they're not happy with the rates their banks set each month after the RBA cash rate announcement, they should do their research and consider shifting to a new lender.
What drives interest rates?
- - Supply and demand: an increase in the demand for credit will place an upward pressure on interest rates, and vice versa
- - Inflation: higher inflation means interest rates will probably rise
- - Government/Monetary policy: when the government buys or sells securities. If the government bought more securities, banks have access to more money than they can use to lend and therefore the interest rate will decrease
Compare home loans today
Whatever the RBA decides each month, it's always a good idea to ensure your home loan stacks up well against what else is being offered in the marketplace. You can compare some current home loan deals below.
Rates last updated October 1st, 2016
Compare savings account interest rates today
It's also a good idea to regularly compare savings accounts to ensure you're still getting a competitive interest rates. Interest rates for high interest savings accounts also increase if the cash rate increases, therefore getting a higher return on your investment.
Rates last updated October 1st, 2016
While the interest rate on variable personal loans can change with the cash rate, they generally don’t. Fixed interest rate personal loans won’t be affected by the cash rate because interest is fixed for the loan term. If you’re looking to get a competitive rate on your personal loan, compare low interest rate personal loans.
Disclaimer: The comments, forecasts, projections and other predictive statements by the panel of experts are assumptions based on currently available information. These forecasts are based on industry trends and economic factors that involve risks, variables and uncertainties. No guarantee is presented or implied as to the accuracy of these forecasts and consumers are advised to read product disclosure statements and understand if financial products are right for them before signing up.
Ask a Question
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
Hi,
I also would like to know what the RBA is likely to do with interest rates over the next 12 months
Regards
Hi TJ,
Thank you for making contact with finder.com.au, an online comparison website.
I have sent through to you via email the same information regarding the RBA predictions that was sent to Patrick by mu colleague Belinda, I hope this helps.
Regards
Jodie
What is the RBA likely to do with interest rates within; 3 months, 6 months, 12 months, and 18 months timeframes.
Refer to movement in interest rates (up, down or no change) and provide reasons.
Hi Patrick,
Thanks for your enquiry.
I’ve sent you an email with some information and findings from our monthly Reserve Bank Survey.
Kind regards,
Belinda
Hi Belinda,
Thanks for your assistance! I found it quite useful.
Hi,
I would like to know when are they going to cut interest rates on Credit Cards ?
Why is the government so spineless when it comes to forcing Banks to lower credit card rates.
Hi Ken,
Thank you for your question.
Interest rate changes in a product range is subject to the bank’s individual lending policies. In regards to monetary policy and the interest rates of banks, changes in the interest rate will create an inverse movement in the monetary supply of an economy, affecting the supply and demand of monetary assets. For more information on why banks need to react accordingly to monetary policy changes it may be recommended to seek the advice of an accredited economic reporting body.
I hope this answered your question.
Thanks,
Sally