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RBA cash rate

Are rates going up or down? What will the next RBA interest rate decision be? Get the latest cash rate predictions and insights from 40+ experts.

The Reserve Bank of Australia sets the official cash rate target. This is a benchmark rate that has a big impact on home loan interest rates, savings accounts and other credit products.

The official cash rate is currently:

4.35%

The RBA's next interest rate decision is on:

6 August 2024

Of the experts surveyed by Finder for June:

100% correctly predicted the cash rate would hold.

Graham Cooke

Graham Cooke - Head of consumer research

The inflation rate is the one number the RBA is most influenced by, so it's unlikely we'll see a rate cut until at least December, if not later.

Finder money experts
Insights and analysis by Richard Whitten, Rebecca Pike and Graham Cooke – Finder money experts

Why you can trust our research

  • 30+ economists surveyed each month
  • 7 years of data and analysis
  • 1000+ home loan rates tracked

The latest cash rate analysis from the experts

Finder regularly surveys 40+ economists and property experts to forecast the RBA's next cash rate decision and get insights into the future of the Australian economy. Here are the most recent cash rate predictions.

May
HOLD
June
HOLD
The data is so conflicting – but I do think that the tax cuts coming up will be inflationary.

May
HOLD
June
HOLD
No recent significant consistent change in CPI

May
HOLD
June
HOLD
I expect the Reserve Bank will keep the cash rate on hold in June, given persistently high inflation.

May
N/A
June
HOLD
Inflation still too problematic for a rate cut, while a a weak economy makes a tightening highly unlikely.

May
HOLD
June
HOLD
I believe the economy has been weak enough that the RBA won't change rates this month, the next CPI data release will be a key determinant of rate changes.

May
HOLD
June
HOLD
The macroeconomy is stabilising now and there is really no need for adjustments to monetary policy settings in this situation.

May
N/A
June
HOLD
The economy is slowing rapidly

May
HOLD
June
HOLD
CPI is slowing albeit not fast enough for the RBA, however when the supply/demand equation equalises a bit more we should see more downside to CPI.

May
HOLD
June
HOLD
The RBA will maintain its restrictive monetary policy setting with no change to the cash rate in June, and are still unlikely to be in a position to cut rates until early next year.

May
HOLD
June
HOLD
Concerns around sticky inflation are justified therefore the RBA would take a cautious non-action stance.

May
N/A
June
HOLD
Despite signs of a slowing economy, the RBA will keep the cash rate steady as inflation continues to be above the target.

May
HOLD
June
HOLD
signs of softening of the economics

May
HOLD
June
HOLD
Mixed data since the last meeting of the Bank board. A bad monthly inflation report alongside better news on whether the economy is slowing sufficiently. The Bank will probably sit on its hands for the next several months.

May
HOLD
June
HOLD
The outlook for Aussie inflation has gotten a little murkier of late. With inflation digging in its heels, the government is ramping up spending to bring it down faster. The government (and RBA) hopes the rebates will lower inflation, first by temporarily lowering the price in the CPI, and secondly by tempering inflation expectations. Treasury expects the rebates to shave 0.5 percentage point from the headline inflation rate in the year to 30 June, 2025. And it's probably not wrong. But the big question is what it does to underlying inflation—the Reserve Bank of Australia’s preferred measure of inflation, which strips out volatile items, often food and energy. These impacts are much less clear. It will all depend on how much of the energy rebates gets spent, and how much gets squirrelled away into savings. If they're spent, it would add to demand at the exact same time the RBA is trying to take it out, adding to underlying inflation even if the headline figure comes down. What’s more, the rebate comes at the same time as a slew of similar rebates from state governments and the reworked stage-three tax cuts, which are set to hand the average worker a tax reduction of A$1,500. All that will ensure the RBA stays put for a little longer; its next move will be down, but we’ll have to wait a little longer. The board will be cautious not to pull the rate-cut trigger too early, what with large amounts about to hit bank accounts. We see rates staying where they are until December, when a 25-basis point cut will take the cash rate to 4.1%.

May
HOLD
June
HOLD
The FED fund rate is still more than 1% point about the RBA cash rate and the increasing worldwide government debt-GDP ratio is keeping upward pressure on interest rates

May
HOLD
June
HOLD
Despite recent cuts by the Bank of Canada and the ECB, the RBA will want to see further progress on inflation coming back to target, including in underlying measures, before starting a cutting cycle. The RBA did not raise rates as high as the Bank of Canada. While the policy rate is clearly having an effect on dampening the domestic economy, it has not had as much effect as in Canada in bringing inflation back down to target. I think it is unlikely that the RBA will raise rates given the weakness in the economy even if some measures of inflation show a small reversal upwards in the coming months.

May
HOLD
June
HOLD
GDP growth in the 1st quarter of 2024 was very weak, and may well be negative in the 2nd quarter. As a result, underlying wage and price inflation should moderate, allowing the RBA to cut the cash rate in September and in November.

May
HOLD
June
HOLD
While there continues to be debate, not mention signals and the markets and data, that policy isn't sufficiently restrictive, the RBA's priority remains balancing the risks to the labour market and inflation. The central bank will stick with its hold and hope strategy for as long as it can.

May
N/A
June
HOLD
Inflation remains above the RBA's target band despite moderating in recent months. House prices appear to have significantly decoupled from incomes and shrugged off the rate increases to date. As long as low unemployment (effectively full employment) persists, the cash rate is unlikely to be reduced and further increases remain a possibility.

May
HOLD
June
HOLD
Despite the latest monthly CPI being somewhat "sticky," other economic indicators suggest a slowdown in employment markets, household spending, and overall growth. This combination of results should see the RBA to keep rates steady.

May
HOLD
June
HOLD
Although inflation is still stubbornly high, the RBA is likely to hold the cash rate constant in the near term. There are signs of weakness in the economy, and the full impact of past rate hikes is yet to be fully felt.

May
N/A
June
HOLD
The economy is on the brink of recession. The unemployment rate is rising. Inflation is falling, even if gradually. The RBA will be in a position to ease in support of the economy later in the year, without unduly rekindling inflation.

May
N/A
June
HOLD
A rate cut from the RBA is unlikely until the end of 2024 or early 2025. They'll likely wait to see a clearer path on inflation before making any moves in either direction. inflation still remains significantly above their target range, however our economy is slowing considerably and we are experiencing a capital recession which will keep economic activity low until the cost-of-living crisis comes under control.

May
N/A
June
HOLD
Inflation is falling, giving the RBA sometime to wait and see what happens.

May
N/A
June
HOLD
Despite the economy flying just above stall speed, the RBA may feel the need to stay the course. especially as the fiscal side looks relatively 'easy'?

May
HOLD
June
HOLD
The economy is very sluggish so inflation may fall sufficiently that the Bank will take its foot off the brake.

May
HOLD
June
HOLD
There is no justification to reduce rates based on current economic data. In fact, its quite the opposite. The pendulum is swinging towards an increase becuase of sticky inflation and a government fiscal policy which is likley to put upward pressures on inflation. Plus, I doubt there is a single Australia right now who is not suffering from sustained and ongoing price increases in such areas as utility/energy, health, food and just general living costs. By way example, many charities cannot keep up with demand due to an increasing number of families struggling to to put food on the table or cover essential living expenses. The possibility of another rate increase is on the cards and that will push many mortgage borrowers over the edge, and take many other Australians with them.

May
HOLD
June
HOLD
Inflation figures still too high for RBA target and proving tricky to get down. Likely that they will hold for remainder of year with chance of first cut in December or early next year

May
HOLD
June
HOLD
Inflation is ticking up not coming down.

May
HOLD
June
HOLD
I think it would take a lot - a 'material' increase in the underlying inflation rate in the near term, or a good reason to extend beyond mid-2026 how long it's expected to take for inflation to reach the mid-point of the target band - to prompt the RBA to raise rates again. But if inflation persists at its current level for longer, as opposed to continuing on a generally downward trend (with the occasional interruption), then the RBA would very likely delay any cuts in interest rates.

May
HOLD
June
HOLD
Cost pressures remain elevated in the services sector. The CPI disinflation to date has been relatively swift, but the remainder of the path back to the target range could be bumpy. Subsidies announced in the budget will lower headline inflation in the near term. But the RBA will be focussed on core inflation - and the loosening of policy is otherwise stimulatory at a time when the RBA is looking to take some steam out of the economy. We now see the first cash rate cut coming in early 2025.

May
HOLD
June
HOLD
Following recent higher than expected inflation data the RBA still lacks the confidence to start cutting rates and so will hold for the next few meetings, with the risks still being on the upside for rates. But weaker growth and lower infaltion should allow a cut by year end.

May
HOLD
June
HOLD
Australia's economy grew by a mere 0.1% in the first quarter of the year, marking the slowest growth since the end of the pandemic, according to the ABS.

May
HOLD
June
HOLD
Weak growth, falling inflation

May
HOLD
June
HOLD
Weaker labour markets will leave the RBA on hold even as inflation proves "sticky". Inflation should be on a clearer downward path by year-end or early 2025

May
HOLD
June
HOLD
No material changes in conditions.

May
HOLD
June
HOLD
Inflation will be increasingly sticky. Embedded inflationary pressures are increasingly evident. Fiscal policy will continue to add to inflationary pressures, especially through the cost of labour. The RBA will disregard the impact of fiscal measures that mitigate 'cost of living pressures' on inflation. Ongoing

May
HOLD
June
HOLD
Yeah, nah! It's interesting! My forecast shows only a 60% probability of the cash rate increase in June but as much as a 75% chance in July. Additionally, the multivariate models for weekly data have the cash rate's current level out of the forecast intervals, indicating a decisive increase. However, the pooled forecast of weekly and monthly data using multi- and uni-variate models says HOLD. The election-year budget could generate inflationary pressure, requiring interest rate increases. However, it's reassuring to note that the government and the RBA are in sync in their view of inflation projection and the means of reaching the target. This alignment, clearly communicated and accepted by the audience, which is reflected in my forecasts. You can access these forecasts at https://forecasting-cash-rate.github.io/

What is the official cash rate?

One of the Reserve Bank's primary roles is setting monetary policy for the Australian economy. This involves setting the cash rate (or to use its full name, the official cash rate target).

At a technical level, the cash rate is actually the interest rate banks pay for borrowing money from each other overnight. Banks use this to manage liquidity and issue funds as needed.

Australian banks can borrow and deposit money with the RBA at just below the current cash rate target.

How the official cash rate target affects interest rates

But for the average Australian consumer, the cash rate is really useful as a broad benchmark for the interest rates on home loans and savings accounts. A high cash rate makes borrowing money more expensive and sees home loan repayments rise.

A low cash rate makes it cheaper to borrow money. This boosts borrowing and spending.

How has the cash rate changed over time?

The Reserve Bank adjusts the official cash rate target over time in response to various economic data, including:

  • Inflation
  • The unemployment rate
  • Global economic factors

The cash rate stayed at the then record low of 1.50% from 2016 to 2019, when the RBA lowered it further in response to low inflation and slightly higher unemployment.

Then as the Covid-19 pandemic began to hurt the Australian economy the RBA dropped the cash rate even further. This was to make borrowing cheaper and stimulate a struggling economy. The cash rate hit the record low of 0.10% during this time.

Now, with inflation soaring the RBA has lifted the cash rate very quickly to try to slow demand and curb price rises.

The graph on the left below shows movements in the official cash rate over time. And the graph on the right shows the market's lowest home loan rates. You can see how the market responds by raising or lowering rates broadly in line with the RBA's decisions.

How does the RBA's cash rate decisions affect your finances?

The RBA can do 3 things with the cash rate: Raise, lower or hold the cash rate at its current level.

Raise

If the RBA lifts the cash rate

When the cash rate rises, most lenders pass on the rate rise to borrowers on variable rate home loans.

If the cash rate rises by 25 basis points, then most borrowers will see 25 basis points added to their home loan's interest rate.

If you have a fixed rate home loan nothing changes. Your rate is locked in for the duration of the fixed period.

Banks may also increase interest rates on term deposits and high interest savings accounts. But in practice home loan rates rise faster than savings account rates.

Down

If the RBA lowers the cash rate

When the RBA lowers the cash rate, most lenders pass on some if not all of the cut to borrowers on variable rate home loans.

Banks also lower rates on savings accounts and other products.

If you have a home loan, it's a good idea to check if your lender has actually passed on the rate cut to you. If it hasn't, you may need to switch.

Hold

If the RBA holds the cash rate

A hold decision means the cash rate isn't changing this month. This means that your home loan or savings account rate likely won't change. You don't really have to do anything.

But banks and lenders change interest rates all the time for various reasons even if the RBA doesn't move the cash rate.

Calculate how much a cash rate rise will impact your home loan repayments

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Enter your loan amount, current interest rate and the latest cash rate increase to quickly estimate how much your monthly repayments will increase.

Example: how changes to the cash rate can change your loan repayments

You have a $600,000 home loan with a variable interest rate of 6.00%. It's a 30-year loan term with principal-and-interest repayments.

Your monthly repayments are $3,598.

⬆️ If the cash rate rises by 25 basis points your interest rate would increase to 6.25%. Your monthly repayments would now be $3,695. This would cost you an extra $97 a month or $1,164 a year.

⬇️ If the cash rate decreases by 25 basis points your interest rate would fall to 5.75%. Your monthly repayments would now be $3,502. This would save you $96 a month or $1,152 a year.

More questions about the RBA cash rate

Check out more RBA news and Finder's RBA survey press releases

RBA news and announcements

Finder's RBA Press Releases

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Editor

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206), a Tier 1 Generic Knowledge certification and a Tier 2 General Advice Deposit Products (RG 146) certification. See full bio

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48 Responses

    Default Gravatar
    CuteyJune 16, 2022

    When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.

      AvatarFinder
      RichardJune 18, 2022Finder

      Hi,

      The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.

      So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.

      The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.

      I hope this helps.

      Regards,
      Richard

    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

    Default Gravatar
    TaneeshaMay 24, 2018

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

      AvatarFinder
      JoshuaMay 24, 2018Finder

      Hi Taneesha,

      Thanks for getting in touch with finder. I hope all is well for you. :)

      Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:

      – 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

    Default Gravatar
    BrookMay 5, 2018

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

      AvatarFinder
      JeniMay 6, 2018Finder

      Hi Brook,

      Thank you for getting in touch with Finder.

      This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
      money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.

      I hope this helps.

      Have a great day!

      Cheers,
      Jeni

    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 RBA forecast through our website.

      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

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