RBA Cash Rate
Your destination for RBA news, expert forecasts and more
1.50%
Cash rate held
at 1.50% on Tuesday 1 August 2017
The Reserve Bank of Australia (RBA) sets the official cash rate target on the first Tuesday of every month except January. Below are expert forecasts from the finder.com.au Reserve Bank Survey™ of some of Australia's brightest minds in economics and property. You can also learn more about the RBA and how its decisions influence the interest rates banks charge, and learn about the best strategies for home owners and investors when there's a rate cut, hold or rise decision.
100% of experts in our survey correctly predicted that the next cash rate move will be to hold the cash rate. Enter our poll and let us know what you think will happen next month.
100%of our resident rate experts
correctly forecast the rate to hold at 1.50% on Tuesday 1 August 2017 View forecasts →
Next meeting: 2:30pm 5th September 2017
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RBA cash rate explained
The RBA meets on the first Tuesday of each month (except January) to decide on the official cash rate target - the rate offered on overnight loans to commercial banks. It can decide to keep the rate the same, raise it, or decrease it. Banks don't have to follow the moves the RBA makes (unless they offer tracker mortgages), but many will adjust their rates after a change.
RBA Forecasts
The finder Reserve Bank Survey™ is a monthly survey which asks some of Australia's most authoritative financial experts what move the RBA will make each month.
Make an informed decision when deciding to fix interest rates or lock your money into a term deposit by seeing what these experts predict will happen.
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Our resident rate experts
Find out what each of our experts predicts for next month and their detailed forecast explanations
The RBA has made it clear it thinks that it has the appropriate monetary policy settings in place. None of the data that we've seen come out this month (on inflation, business confidence, employment etc) will have meaningfully impacted that view. As such, notwithstanding their renewed concern regarding the strength of the AUD, we think they will keep rates on hold when they meet next week
N/A
While growth was weaker than expected in the March quarter, recent data suggests its back on track reducing pressure to cut rates again but risks around the consumer, weak inflation and a rebound in the $A indicate its way too early to hike rates. So best to remain on hold.
Little change in the main indicators.
Robust labour markets and a soft headline CPI outcome for Q2 (and 'core' measure being inline with the RBA's forecasts) underscores there is no economic rationale to move rates in either direction. Financial stability concerns seemingly prevent further easing. And a higher A$ deters premature hiking
Last month, the Reserve Bank of Australia made it clear that its current monetary policy setting is appropriate for the time being and I believe this will continue to be the case at the August Board meeting.
The RBA doesn't see the current cash rate as necessarily all that expansionary and remains concerned about the impact of rate rises on households with the very high gearing, stagnant wages and rising utilities prices.
Christine Williams
July
N/A
August
No change
All indicators show a stable economy. However the property market in Melbourne and Sydney is not showing a retraction under the $1,000,000 mark as may have been hoped by the RBA.
The RBA does not want to cut interest rates for fear of boosting the housing market and debt levels, but equally the economy and inflation aren't strong enough to warrant interest rate hikes.
Although RBA would like to cut rates to take upward pressure off the Aus dollar, it can't cut rates as it fears restoking the residential property market. With inflation low and particularly wages growth very low, there is no need to raise rates for at least 2 years.
Inflation remains well contained. RBA would be concerned about the lift in the Aussie dollar. Focus will be on how economy tracks over the next few months.
The RBA is clearly determined to leave rates at current level taking a more medium-term view of the macroeconomy regardless of the current insipid intransigence of key economic performance indicators.
Bias remains to the downside with the economy struggling to generate momentum. With banks (and APRA) tightening credit the markets and sentiment are softening. Further support is required, but the rba is likely to not be willing to provide this as this stage.
Inflation is still below the target band, so no immediate move in sight.
Scott Morgan
July
N/A
August
No change
No indication of likely move from recent commentary.
Low wages growth means inflation is largely in check. High levels of household debt mean increasing rates is challenging.
Nerida Conisbee
July
N/A
August
No change
While earlier in the month strong jobs growth figures suggested that the economy was on track, the strengthening Australian dollar put a dampener on the need for an increase. Inflation figures out today are likely to further cemented the RBA’s decision to take a wait and see approach with these figures continuing to be below the target of between 2 and 3%.
Despite the RBA likely to hold, it is likely that banks will continue to increase the rates they charge home owners. This is partly because their costs of wholesale funding have increased but also because there is continued pressure from APRA to moderate their lending. The banking tax announced in the budget is also likely to be passed on to home owners.
The RBA will be concerned about the rise in the AUD and will not be looking to add fuel to the fire.
Peter Munckton
July
No change
August
No change
Cash rate is at the right level.
No signs in the data that they need to change their views of the world or their policy stance.
The RBA has indicated its intention to cautiously manage inflation to the preferred 2-3% range while at the same time appears reticent to reduce rates further. The weak inflation forecast in the June CPI figures point to a steady rate scenario for the short term. With employment levels also steady, this is good news for the property market on the whole.
Interest rate settings remain appropriate. Economy performing a little below trend, inflation remains at the lower end of target, and the Aussie dollar is higher than the RBA would like. Holding rates at their current highly accommodative level is appropriate to allow the economy to continue to gain momentum as the unwind of the mining boom ends, the housing construction peak passes (but activity remains at a robust level for some time – i.e. no major drop) and, hopefully, other sectors pick up.
Inadequate info to move one way or the other
Phillip Lowe said so!
There has been little discernible change in economic indicators since last month’s RBA meeting.
RBA statements and the increase in the value of the AUD.
With the high dollar, low inflation and low wage growth there is no rush to put up rates just yet.
Current settings are appropriate for employment and inflation settings.
The RBA can't raise rates as it would stifle our fragile economy and would lead to a higher AU$. Similarly, it can't lower rates as this would fuel the Sydney and Melbourne property markets.
Probably the strongest signal in history that the RBA will sit on its hands for the next couple of meetings, particularly given the latest inflation outcome.
The RBA would clearly prefer not to have to cut rates any further, but is also in no hurry to start raising them (even if central banks elsewhere in the world do). Economic data since the last Board meeting (more good data on employment, business conditions, offset by another quarter of very low inflation, softness in household spending) don't present a strong case to move in either direction.
Still too early. Watching wages and the labour market.
Still too early. Watching wages and the labour market.
I think we are at the bottom of the cycle but don't see any urgent need to raise rates.
RBA will still have concerns about spare capacity and low inflation. However, risks of another rate cut have clearly dissipated.
Other experts on the panel
Garry Shilson Josling
May
N/A
June
N/A
The economy is doing enough to allow the RBA to stay on the fence, and there are hints that inflation is bottoming out.
Continuation of excess capacity in the labour market, and the maintenance of inflation below RBA target band.
The holding pattern will continue, despite a weak growth and inflation outlook, until the housing market is clearly in retreat.
I don't think the interest rates will fall further because: the Reserve Bank is keen to limit the amplitude of the residential cycle amid concerns about household debt and financial stability risks. Hence, it would not want to reignite the housing boom. A lower cash rate will reduce the dollar but it will have little effect on investment. Meanwhile, the Federal Reserve is on a tightening phase and rate rises in the United States will narrow the interest rate differential with Australia and put downward pressure on the A$. The Reserve Bank is also concerned that the more they reduce rates now, the sooner they will have to raise interest rates.I therefore expect the cash rate to stay at 1.5% over calendar year 2017 and 2018.
The current economic data is inconclusive of a need for a shift.
Labour market strengthening balances against sub target inflation. Little case to ease yet too early to tighten.
N/A
Melissa Browne
May
N/A
June
N/A
I don't believe there's a case to cut rates at present and certainly no reason to move them upwards.
Shane Garrett
May
N/A
June
N/A
Inflation is at comfortable rate, growth does not require further support at this time. The foreign exchange rate is balanced.
Warren Hogan
May
N/A
June
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.
Stephen Koukoulas
May
N/A
June
N/A
RBA continues to place far too much weight on Sydney and Melbourne housing markets and not enough on the rest of the economy which is crying out for lower interest rates.
Scott Pape
May
N/A
June
N/A
The cuts are coming… just not this month.
David Bassanese
May
N/A
June
N/A
Annual underlying inflation has been confirmed as running 0.5% lower than the RBA expected 6 months ago.
Chris Caton
May
N/A
June
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
May
N/A
June
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
May
N/A
June
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.
Peter Haller
May
N/A
June
N/A
There is nothing in the underlying economic data to justify a change in rates.
Jason Spencer
May
N/A
June
N/A
There is no significant weakening in the Australian economy to justify a drop at this time.
Robert Montgomery
May
N/A
June
N/A
The RBA will wait for more movement in underlying economic indicators.
Lynne Jordan
May
No change
June
N/A
Household debt levels, low wage growth, active property investors and a weak inflationary environment still present a major policy challenge for the RBA. I don’t think we’ll know exactly when the RBA’s next move will be until CPI data comes out at the end of April. If Inflation has gone up, we lean closer towards the rate increase many economists have predicted. But if it is the same or lower, the RBA will likely hold the cash rate and remain in the same predicament it has been for the past few months – that investors will continue to make the most of low interest rates and drive up prices, which could result in household debt levels increasing even further.
Matthew Pollock
May
N/A
June
N/A
The Q3 CPI result was low but showed signs of improvement. on top of that commodity prices are on the improve and should give a much need boost to national income growth, and in turn lift price growth.
Lisa Montgomery
May
N/A
June
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
May
N/A
June
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.
Paul Clitheroe
May
N/A
June
N/A
It's a curate's egg. The economy is not all bad… Global volatility makes predicting a dangerous sport.
Ken Sayer
April
N/A
May
N/A
The downward pressure on rates has been overshadowed by international influences.
Effie Zahos
May
N/A
June
N/A
The next inflation report isn't due until July 27 so it could be a case of hold steady until August.
Emily Dabbs
May
No change
April
N/A
Inflation pressures are strengthening, full-time employment has improved, and high household debt continues to pose a risk to financial stability.
Peter Boehm
May
N/A
June
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
May
N/A
June
N/A
Uncertainty in the equity markets and slowing property price growth.
Linda Janice Phillips
May
N/A
June
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.
Angus Raine
April
N/A
May
N/A
N/A
Nathan McMullen
April
N/A
May
N/A
RBA likely to review Q2 inflation data due late July before revisiting changes to the cash rate.
Angelo Malizis
May
N/A
June
N/A
No economic reason to move at this stage.
David Scutt
May
N/A
June
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."
Economy is not in need of any extra interest rate assistance.
Gavin Smith
May
N/A
June
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
May
N/A
June
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
George Tharenou
May
N/A
June
N/A
We believe the RBA has drawn a "line in the sand" at the 1½% y/y pace for underlying inflation, given it is the lower bound of every single point forecast the RBA has out until the end of 2018. If underlying inflation were to drift below this in coming quarters, the RBA would likely feel under some pressure to further lower the cash rate. Absent this, we see the RBA on hold at 1.5% for the foreseeable future.
Richard Holden
May
N/A
June
N/A
Inflation data was not terrible.
Neville Norman
May
N/A
June
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 announcements
RBA decisions
How the cash rate can impact your finances
See how the cash rate changes can affect your savings, term deposits, home loans and what you can do about it.
If the rate rises
Find an account which offers the same features and fees but with a better rate.
If the rate gets cut
Consider comparing a competitive term deposit rate so your interest earnings don't suffer.
If the rate holds
Carry out a quick comparison to make sure you're getting the best return on your money, see what promotions banks are offering.
If the rate rises
Ask your lender for a rate discount so that if rates do rise you won't be worse off, or alternatively, compare other variable or even fixed rate home loans to find a better deal.
If the rate gets cut
See how your lender responds to the cut. If they don't pass on the full rate cut, ask for a rate discount, and if you're still not happy start comparing what other deals are in the market. Some lenders have been known to pass on more than the official rate cut after an RBA announcement!
If the rate holds
Compare other variable rate home loans to make sure you're still getting the best deal. If rates are tipped to rise in the near future you may also want to compare fixed rates.
If the rate rises
Your rate won't rise as you locked it in, so you can relax a little. If your fixed rate is soon to end, start comparing what deals are being offered so you don't find yourself scrambling to lock in another rate.
If the rate gets cut
If you feel your home loan is no longer competitive, you might want to obtain a quote from your lender to find out possible exit costs. If this figure is reasonable, you might want to consider comparing variable home loans. Use our switching costs calculator to see if you'd save.
If the rate holds
Because your rate is fixed for an agreed period of time, a decision by the RBA to hold won't have as much of an effect on you depending on how long you still have to go in your fixed term. As mentioned above, you might still want to monitor the other deals in the market to keep informed.
If the rate rises
If rates rise, savings accounts rates could be increased as well. If this happens, you might want to compare the rates of high interest savings accounts. Remember that most term deposits have interest penalties if you withdraw your funds early, so keep this in mind.
If the rate gets cut
Your rate won't change because it's locked in, but if you're nearing the end of your term start comparing both high interest savings accounts and term deposits to find a good deal.
If the rate holds
Compare accounts and ensure you're aware of what's being offered in the market.
History of the Reserve Bank of Australia official Cash Rate
The graph above shows the movement in the official cash rate target. A lower cash rate reduces the cost of borrowing money so more people are encouraged to borrow - stimulating the economy. Higher interest rates tend to encourage spending. This is how a rise or fall in rates affects the level of supply and demand and therefore the level of inflation - which the RBA wants to keep in the target range of 2%-3%.
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 2-3%. 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 closely.
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 current home loan deals below.
Rates last updated August 23rd, 2017
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 August 23rd, 2017
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 in our guide.
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 an Expert
What do you think will be the next move for RBA on cash rate and when?
Thank you!
Hi Rob!
Thanks for the comment.
As of the moment, most of resident rate experts predict that rates will be the same. The cash rate target is released on the first Tuesday of every month except January.
You can follow the updated forecast right here.
Hope this helps.
Cheers,
Jonathan
Thanks Jonathan, I meant in the longer term, 6-12 months.
Hi Rob!
We appreciate your follow-up.
Currently, there are multiple factors that need to be considered and due to the volatility of these factors, it is a bit hard to conclude whether they’ll leave the rates unchanged for the next few months or not.
If you have further inquiries, you may contact:
Media and Communications
Secretary’s Department
Reserve Bank of Australia
SYDNEY
Phone: +61 2 9551 9720
Fax: +61 2 9551 8033
Email: rbainfo@rba.gov.au
Hope this helps.
Cheers,
Jonathan
When do you think the RBA will start raising rates?
Hi Julie,
Thank you for contacting finder.com.au we are a financial comparison website and general information service.
It is hard to predict the movement of the cash rate as it is based on a multitude of factors that are continually changing however 7 out of the 38 experts we surveyed in our latest RBA survey for September 2016 said they predict it will start going up in July 2017 or beyond.
Regards
Jodie
Hi Belinda
Appreciate if you would also send me informations regarding findings of monthly RBA survey.
Regards
Eric
Hi Eric,
Thanks for getting in touch.
On this page, you can view the RBA Cash Rate Target Announcements for each month from February 2015 until February 2016. You can also view the commentary of our resident rate experts in the lead up to each Board meeting which occurs on the first Tuesday of every month (except January).
Please feel free to sign up to receive our detailed RBA cash rate updates by completing the form provided above.
Regards,
Belinda
Hi,
My new house is ready now and wondering what is the best time to sell, should I put my house in the market now or January or wait for the February. I am not committed any where so I can wait.
Your advise needed.
Thanks
Hi Syed,
Thanks for your enquiry.
As finder.com.au is an online comparison service so we are not licensed to give you personal advice regarding the best time to sell your property.
You can read our guide here about considerations when selling your house.
All the best,
Belinda
hello.
i wonder if i could receive some information regarding not only the latest current economic situation, but also cash rate movements over the year.
Hi Dongho,
Thanks for your enquiry.
Above on this page you can view the ‘Reserve Bank monthly announcements’ to read about the cash rate movements and monetary policy decisions that have occurred over the course of this year. You can also sign up to receive our RBA cash rate updates by filling in the form provided above.
In regards to the current economic situation, finder.com.au is an online comparative website and we can’t comment on the activity of the broader Australian economy.
Thanks,
Belinda
Can you please send through the information on the RBA via email?
I’m doing a school Economic assignment on the RBA and financial markets
Hi Oli,
Thanks for your enquiry.
I’ve emailed you with some information regarding the findings from our monthly RBA survey.
Please note that on this page you can sign up to receive our RBA cash rate updates.
Thanks,
Belinda
Hi,
I was just wondering if I could have information regarding how interests rates will unfold over the next year. In particular, if the current interest rates will be appropriate for the economic conditions in Australia.
Thank you
Yazmin
Hi Yazmin,
Thanks for your enquiry.
Firstly, I’d like to point out that finder.com.au is an online comparison and general information service so we’re not in a position to forecast interest rates.
However, on this page you can sign up to receive our RBA cash rate updates which you might find useful.
Thanks,
Belinda
I also would like to know what the RBA is likely to do with interest rates over the next 12 months or at least material to allow me to make my own assessment please.
thank you
Jeff S
Hi Jeff,
I have emailed you the information we sent to others people who have asked us regarding the RBA.
Regards
Jodie
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.