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RBA cash rate

Find the current RBA cash rate, read expert forecasts on the bank's next move and learn what it all means for your finances.

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hold

0.25%

CASH RATE HOLD

RBA decision made 07 July 2020
  • At its latest meeting on 07 July 2020 the Reserve Bank of Australia decided to hold the cash rate at its historic low of 0.25%.
  • 100% of our experts correctly forecast the RBA's decision.
Next rate meeting: The board of the Reserve Bank meets on 04 August 2020 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.

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The latest cash rate analysis from the experts

Here are the most recent cash rate predictions and commentary from the experts in our panel for the July 2020 cash rate decision.

June
HOLD
July
HOLD
The RBA have indicated it will not raise interest rates until unemployment levels fall to around 4.5%. This is many years away
 
June
HOLD
July
HOLD
Monetary policy will continue to be sidelined over foreseeable future with no logical purpose served by a further cut to 0% and the prospect of a rise fanciful given economic conditions set to worsen
 
June
HOLD
July
HOLD
The RBA will remain on hold. There is little to no value in taking rates to zero or negative and given the recession, high unemployment, uncertainty about the recovery and inflation running way below target its way too early to think about raising rates. In fact its unlikely to be able to raise rates for the next three years at least.
 
June
HOLD
July
HOLD
We have years of low interest rates ahead of us and the banks themselves have sharpened their pencils in recent times, cutting their rates on various products to remain competitive. The pandemic continues to cast a shadow over the economy and the outlook is meagre, but for those whose income remains secure, a real estate purchase is comparatively affordable at present.
 
June
HOLD
July
HOLD
The RBA won't be increasing the cash rate until the unemployment rate is near 5 per cent, which is unfortunately at least a couple of years away.
 
June
HOLD
July
HOLD
The economy will need monetary policy support for a long time to come.
 
June
HOLD
July
HOLD
There is significant uncertainty around the timing of a vaccine for COVID-19 which impacts the point at which the Australian and global economy will start to recover.
 
June
HOLD
July
HOLD
Consistent with signalling from RBA
 
June
HOLD
July
HOLD
I do not believe the RBA will entertain a zero or negative cash rate. The banking industry is not in need of lower rates and even if provided, there will not be any rate reduction passed on the customer. There is still QE opportunities to stimulate the market if needed.
 
June
HOLD
July
HOLD
Worst economic circumstances since Great Depression
 
June
HOLD
July
HOLD
It will be a long road back, especially as the Government appear to be keen to reduce the extent of the stimulus
 
June
HOLD
July
HOLD
If the virus is satisfactorily contained, and assuming no second wave, the economy should be recovering by the December quarter. In the context of a domestic and global recovery, the high money growth stemming from public debt monetisation should put upward pressure on the price level, necessitating a monetary policy response. Additionally, the huge issues of government bonds to fund large pandemic- related budget deficits that have not been monetised by central banks here and worldwide would normally put upward pressure on longer term world interest rates.
 
June
HOLD
July
HOLD
This is so difficult – there are so many uncertainties. but, of course, if a vaccine is found the economy may boom.
 
June
HOLD
July
HOLD
Now is not the time to move interest rates - there's too much economic uncertainty, and clarity around the federal government's existing, and future planned response to COVID-19 is needed before further rate movements should be contemplated.
 
June
HOLD
July
HOLD
The RBA have indicated that they will keep the rates low for a long period. At the moment its too early to have a view of when the rates will tighten again, although 'sometime' in 2022 would be reasonable...
 
June
HOLD
July
HOLD
RBA on hold until back close to full employment and underlying inflation sustainably in the 2-3%YoY band
 
June
HOLD
July
HOLD
The RBA have very clearly flagged that rates will be on hold at 1/4 % (for both official cash and the 3 year bond) until well into 2022. The next move beyond there should be up when inflation finally rises and labour markets tighten.
 
June
HOLD
July
HOLD
The RBA Governor has publicly stated that the cash rate will remain where it is for a long time.
 
June
HOLD
July
HOLD
Far to much volatility and uncertainty to see any moments in interest rates at the moment
 
We suspect the RBA will come around to our view that inflation will be below the Bank's target for years and therefore launch more stimulus. We expect the RBA to eventually expand quantitative easing with a quantity bond target aimed at the longer-dated end of the yield curve.
 
June
HOLD
July
HOLD
Could be that the RBA keeps rates on hold until after Q4 2022
 
June
HOLD
July
HOLD
It's unlikely that the RBA will drop rates further and is expected to continue to support the economy via other stimulatory measures until the full impact of the COVID crisis passes.
 
June
HOLD
July
HOLD
The post COVID-19 recovery will be in place and inflation will edge up toward the RBAs target.
 
June
HOLD
July
HOLD
The RBA have indicated they will keep rates where they are for a long time.
 
June
HOLD
July
HOLD
I don't think that further moves in the cash rate would be effective, and given uncertainty around Covid the timing of future moves is highly uncertain, but doubtful rates will move before 2022.
 
June
HOLD
July
HOLD
I think that the Government will need to see what happens when the stimulus payments end and the economy finds its new position.
 
June
HOLD
July
HOLD
“I expect the cash rate to remain unchanged at the Reserve Bank’s next monetary policy meeting until progress is made towards the RBA’s goal of full employment and the inflation target. The historic low cash rate continues to support an extremely low cost of borrowing and we are seeing a surge in the number of borrowers choosing to refinance and lock in a fixed-interest rate.”
 
June
HOLD
July
HOLD
Clear guidance given by RBA the current monetary policy will remain
 
June
HOLD
July
HOLD
Unstable economy at the moment
 
June
HOLD
July
HOLD
The RBA has provided forward guidance about its use of unconventional policies in several speeches since March. During questions following one of these speeches, Governor Philip Lowe has indicated that the cash rate will not be lifted before the 3-year bond yield target has been lifted. In addition, he said that the bond yield target will not be removed until progress was being made towards the RBA's inflation and unemployment targets. This is estimated to be at least 3 years away.
 
June
HOLD
July
HOLD
It is difficult to predict now due to the high uncertainty surrounding the COVID-19 crisis and the subsequent economic crisis. The focus of the policymakers at this stage should be stimulating the economy, but there is not much room in the monetary policy space for that. At this stage, the government's fiscal stimulus is much needed to spur the economy.
 
June
HOLD
July
HOLD
Hard to pinpoint when there might be changes, since there's so much uncertainty and the RBA will be making decisions as necessary to keep borrowing costs low and credit available.
 
June
HOLD
July
HOLD
Any decision by the RBA to either increase or lower the cash rate is highly unlikely for some time and we can expect the cash rate to remain exactly where it is now for at least the next two years. The most likely direction the cash rate will head eventually is upwards, but we will need some fairly solid and consistent signs of recovery in the labour market before the RBA starts to consider this change. Towards the fourth quarter of 2021 we should be well on our way to more positive signals here, but much will depend on the level of government support and stimulus committed to jumpstart the economy and our ability to minimise and prevent COVID19 outbreaks. Both are very uncertain right now.
 
June
HOLD
July
HOLD
The RBA have made it clear that, for now at least, they don't see negative rates as being necessary or effective. So I think the next move will be up, but it will be quite some time into the future - beyond the end of the forecast horizon in the survey (Q4 2022).
 
June
HOLD
July
HOLD
Rba will keep it's accommodative stance for some time while unemployment remains high. Indeed, the risk is towards additional monetary stimulus measures but the rba will look to other measures. The cash rate is as low as it can go.
 
June
HOLD
July
HOLD
As much as the RBA is insistent that the current cash rate of 0.25% is their floor, depending on the recovery from COVID-19 it may necessitate taking rates lower. Remember that just last year they were saying they didn't believe in QE's effectiveness. Even if they don't cut interest rates further, a hike in interest rates seems likely to be a long way off.
 
June
HOLD
July
HOLD
The headwinds to growth are strong and I do not think that inflation will be comfortably within the current 2-2% target range until the end of 2022. I do not think the RBA will lower rates. If they wish to ease further they will employ some other mechanism.
 

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

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).

A higher cash rate makes borrowing money more expensive. But it also means interest rates on savings accounts can increase, which is good for savers.

Here's an example of how a change to the cash rate affects a home loan. Let's assume the following:

  • The RBA moves the cash rate in increments of 0.25%.
  • You have a variable rate home loan and your lender passes on the RBA's raise or cut in full.
  • Your loan term is 30 years.

Let's look at some example home loans:

Cash rate cut

  • Loan amount: $400,000
  • Interest rate: 3.50%
  • Monthly repayment: $1,796
  • Rate cut: -0.25%
  • New rate: 3.25%
  • New monthly repayment: $1,740
  • Saving: $56 a month or $672 a year

Cash rate rise

  • Loan amount: $600,000
  • Interest rate: 3.50%
  • Monthly repayment: $2,694
  • Rate rise: 0.25%
  • New rate: 3.75%
  • New monthly repayment: $2,778
  • Extra cost: $84 a month or $1,008 a year

What should I do if the cash rate changes?

See how changes to the cash rate can affect your savings, term deposits, and home loans and what you can do about it.

If the cash rate rises

Check your loan's interest rate. If it has increased, ask your lender for a rate discount or see if they have a similar product with a better rate. You should also look at other rates on the market and consider refinancing if you find a cheaper loan.

If the cash 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 cash 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 cash rate rises

Find a high interest savings account which offers the same features and fees but with a better rate.

If the cash rate gets cut

Consider comparing a competitive term deposit rate so your interest earnings don't suffer.

If the cash 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 and find out if switching is worth your while.

Fixed rate home loans aren't directly affected by changes to the cash rate. But the cash rate does influence lenders decisions to set fixed rates. If you're already on a fixed rate loan there's not much you can do until the fixed rate period ends.

It is possible to exit a loan during the fixed period but there are break costs for doing so.

If the cash 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 cash 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 cash 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 cash 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 cash 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 cash rate holds

Compare accounts and ensure you're aware of what's being offered in the market.

Check out Finder's RBA survey press releases

RBA news and announcements

Ask an Expert

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46 Responses

  1. Default Gravatar
    octoJune 18, 2018

    how long can AUD interest rate remain Low…..?

    how soon will the AUD follow the US FED Rate Hike…….?

    thank you

    • Default Gravatar
      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

  2. Default Gravatar
    TaneeshaMay 24, 2018

    Do you think the cash rate will stay the same at the June RBA meeting?

    • Avatarfinder Customer Care
      JoshuaMay 24, 2018Staff

      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

  3. Default Gravatar
    BrookMay 5, 2018

    What do you think that how the international economic condition influence the cash rate?

    • Avatarfinder Customer Care
      JeniMay 6, 2018Staff

      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

  4. Default Gravatar
    RobJune 11, 2017

    What do you think will be the next move for RBA on cash rate and when?

    Thank you!

    • Default Gravatar
      JonathanJune 11, 2017

      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

    • Default Gravatar
      RobJune 11, 2017

      Thanks Jonathan, I meant in the longer term, 6-12 months.

    • Default Gravatar
      JonathanJune 11, 2017

      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

  5. Default Gravatar
    JulieSeptember 1, 2016

    When do you think the RBA will start raising rates?

    • Default Gravatar
      JodieSeptember 7, 2016

      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

  6. Default Gravatar
    EricFebruary 25, 2016

    Hi Belinda

    Appreciate if you would also send me informations regarding findings of monthly RBA survey.

    Regards
    Eric

    • Avatarfinder Customer Care
      BelindaFebruary 26, 2016Staff

      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

  7. Default Gravatar
    SyedDecember 8, 2015

    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

    • Avatarfinder Customer Care
      BelindaDecember 9, 2015Staff

      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

  8. Default Gravatar
    loooooolAugust 16, 2015

    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.

    • Avatarfinder Customer Care
      BelindaAugust 17, 2015Staff

      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

  9. Default Gravatar
    OliJuly 17, 2015

    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

    • Avatarfinder Customer Care
      BelindaJuly 17, 2015Staff

      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

  10. Default Gravatar
    yazminJuly 7, 2015

    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

    • Avatarfinder Customer Care
      BelindaJuly 8, 2015Staff

      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

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