Find the current RBA cash rate, read expert forecasts on the bank's next move and learn what it all means for your finances.
hold
0.10%
CASH RATE HOLD
RBA decision made 06 April 2021
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100% of our experts correctly predicted that the RBA would hold the cash rate at its meeting on 06 April 2021
The official cash rate remains at the historic low of 0.10%
Next rate meeting: The board of the Reserve Bank meets on 04 May 2021 to decide the future of the cash rate.
Finder surveys over 40 economists and property experts every month to forecast the RBA's next cash rate decision. Experts also provide commentary on the current state of the property market and the Australian economy. We update the page with new forecasts at the end of the month and again on the first Tuesday of the month, when the board of the Reserve Bank meets to make its decision.
Every month (except January) the Reserve Bank of Australia sets the official cash rate. This rate affects the borrowing costs of banks and in turn affects interest rates on home loans, savings accounts and more. The cash rate is not only an indicator of the country's economic health. It has a direct impact on many Australian borrowers' home loan interest rates.
Read on to see our expert predictions on the cash rate and learn what the cash rate is and how it affects your financial products.
The RBA’s preconditions for a rate hike - namely actual inflation sustainably within the 2-3% target, materially higher wages growth and a tight labour market - are unlikely to be met for several years.
The Reserve Bank has doubled down on its declaration that rates will remain low for some time to come and with JobKeeper now out of the picture, this is not the time to review this approach. The onus now falls on Government to create as soft a landing as possible for consumers affected by the removal of this stimulus, and businesses too, as a consequence.
The RBA has made it very clear they will not increase interest rates until unemployment is low enough to stimulate wages growth. This is some time off, and these levels of unemployment have not been achieved since the GFC
I think the economy may well heat up with the balance sheets of households leading to recovery and once that recovery takes hold the money on household balance sheets may come tumbling out of them.
The RBA has been so emphatic that they won't increase the cash rate until "2024 at the earliest", that it's difficult not to take them at their word. Nonetheless, I am surprised that they haven't left themselves at least a bit of 'wriggle room' to allow for the possibility - which, though small, is surely not zero - that the economic conditions they've stipulated for raising the cash rate aren't met before then.
Low interest rates will be with us for the foreseeable future. We need to understand the impact of the removal of Jobkeeper, which is likely to see an increase in unemployment and small business closures. Such an impact may be significant meaning increasing interest rates is not going to support the unemployed or boost economic activity. The next 3-4 months will be telling for the direction of the Australian economy.
No change to official interest rates will be seen for this year and most of next year, but subject to the speed and success of the vaccine rollout the economic upswing should be a sharp one, requiring higher interest rates.
Despite what the RBA is saying, a cash rate rise will be inevitable should inflationary pressures suddenly build here and overseas. Massive government bond issues worldwide to cover large ongoing budget deficits will also continue to exert upward pressure on bond yields. Although asset price inflation is not officially targeted, continued escalation of housing and share prices also suggests tighter monetary policy could be warranted sooner than expected.
The RBA will not increase the cash rate until the unemployment rate falls to around 4 per cent and the inflation rate is clearly in the 2-3 per cent target range.
The RBA has been clear that it is not keen to ease monetary policy prematurely. It appears the Bank has lowered its estimate of the natural rate of unemployment to close to 4% so the recovery in the labour market still has a long way to go.
The RBA will continue to hold rates steady, at the current record low levels, until inflation rises and unemployment falls to sit within its target range.
If property prices continue to rise, the inflationary pressure will likely cause the RBA to move interest rates before the time they have currently forecast.
RBA board members are likely to keep the cash rate on hold once again. All eyes will be on the nation’s labour market and the unemployment rate, which is likely to rise with the end of JobKeeper. In the meantime the low cash rate and 'Fear of Missing Out' continue to drive up house prices.
While bond yields are rising and the economic recovery is stronger than expected, I believe that the RBA is determined to reach it's inflation and full employment targets before lifting rates. I don't believe they will achieve both of those thing until 2023 or later.
The RBA are waiting for core inflation to stabilise within it range of 2%-3%, which is some time off even under a strong upside growth scenario. The market has run ahead of the RBA and will rerate the timing of the first rate hike after the RBA's next meeting.
The RBA will look through the upcoming increase in inflation and wait for wage pressures to lift core inflation above 2% before increasing rates. Progress toward a tighter labour market continues to beat expectations, but it will be some time before wage growth increases materially.
GDP is unlikely to grow strongly over the coming year and so inflation is likely to stay within acceptable limits. I think it more likely at least in the short term that the Government would prefer to buy bonds rather then use interest rates to regulate the economy
The pace of the recovery appears to be quickening such that the pre conditions set by the RBA for a rate increase may occur earlier than their 3 year horizon.
The RBA has absolutely no justification based on the current economic environment to wind back any of its stimulus measures. I don't expect it will contemplate such moves until the unemployment rate is at or below 5%
2021 looks likely to see a reflation move that sees the end of RBA yield curve management and sets the stage for a review of the existing ultra-low rate environment.
The economy could right now go one of two ways. It could continue its rapid recovery and surpass expectations of growth and employment, hoovering up spare capacity, and pushing up inflation until we reach the 2% threshold. In its response, the RBA could be looking to add a quarter of a basis point to official interest rates by the end of 2021. But we could also see the hard-earned gains won eroded rapidly, as lockdowns continue, safety nets disappear and vaccinations roll out at a snail’s pace. This scenario, is a very real possibility, and is playing out right now in Brisbane. Business confidence will quickly wane and employment will begin to head backwards – as will any inflationary pressures (sans the housing market, which is already overheated). Interest rates under this scenario would take some time to lift again.
The RBA has set a very high hurdle for a cash rate hike - actual inflation sustainably in the 2%-3% target range will need wages growth of at least 3%.
Unlikely that there will be inflationary pressure in the economy for sometime
How has the cash rate changed over time?
The graph below shows the movements in the official cash rate over time and is updated every month whenever the RBA announces a cut, raise or hold.
What is the official cash rate?
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.
Their decision is influenced by 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.
How the cash rate can impact your finances
The RBA can do three things with the cash rate: increase it, lower it, or hold it. The bank generally moves the cash rate in increments of 0.25%, though it did make cuts of 0.10% and 0.15% in 2020.
What does a cash rate increase mean for you?
A higher cash rate makes borrowing money more expensive. This is bad news for borrowers. But it also means interest rates on savings accounts can increase, which is good for savers.
Here's how a cash rate rise affects your finances.
If you have a home loan. If you have a fixed rate home loan you don't need to worry. Your rate will not rise during the fixed period. If you have a variable rate home loan your lender might increase your home loan rate in response to the RBA's decision. If this is the case, you should start comparing home loans and look for a better deal.
If you have money in a high interest savings account. Rate rises mean higher interest rates on savings accounts. Again, look around and see if you can find a high interest savings account with a better rate.
What does a cash rate decrease mean for you?
A lower cash rate means borrowing money is cheaper. That's good news for people with mortgages, especially variable rate home loans, which are directly affected by the cash rate (fixed rate loans, as the name implies, don't change until the fixed period ends).
Here's how a cash rate cut affects your finances.
If you have a home loan.If you have a variable rate loan, see how your lender responds to the cut. If your lender doesn'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. If you have a fixed rate loan you won't see any benefit now because your rate is fixed.
If you have money in a high interest savings account. Your interest rate will likely fall. You might still be able to find a better deal elsewhere. If you are hoping to generate some wealth through interest you might choose to put your money in a term deposit or an investment fund instead.
Here's an example of how a cash rate cut or increae can affect a home loan. Let's assume the following:
The RBA has reduced the cash rate by 0.25%.
You have a variable rate home loan.
Your lender passes on the RBA's raise or cut in full.
Richard Whitten is a senior writer at Finder, and has been covering home loans and the property market in Australia for the last 4 years. He has written for Yahoo Finance, Money Magazine and Homely, as well as multiple banks and lenders. Richard has a Certificate IV in Finance and Mortgage Broking, a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communication. He enjoys helping people understand the ins and outs of mortgages so they can make smarter property decisions. Richard trained as a high school teacher but found it easier to manage personal finances than a classroom full of kids. Before joining Finder, he edited textbooks and taught English in South Korea.
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.
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:
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, refer to the Domestic Economic Conditions file.
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.
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
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.
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.
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.
The best time to sell your property relies on plenty of other factors that you need to consider before selling your house. Our guide to find out when really is the best time of year to sell your house might be handy for you.
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.
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.
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.
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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 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
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 RBA forecast through our website.
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.
The best time to sell your property relies on plenty of other factors that you need to consider before selling your house. Our guide to find out when really is the best time of year to sell your house might be handy for you.
You can also refer to a guide on everything you need to know before you sell your house on this page. You can also speak to a real estate agent for assistance.
I hope this helps.
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 have emailed you with some information regarding the findings from our monthly RBA survey.
You may also sign up for RBA cash rate forecast and 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.
While we are not in a position to forecast interest rates, you can sign up to receive our RBA cash rate updates which you might find useful.
Thanks,
Belinda