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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.

Updated . What changed?

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hold

0.25%

CASH RATE HOLD

RBA decision made 06 October 2020

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  • At its latest meeting on 06 October 2020 the Reserve Bank of Australia decided to hold the cash rate at its historic low of 0.25%.
  • 85% of our experts correctly predicted the RBA's decision to hold the cash rate
Next rate meeting: The board of the Reserve Bank meets on 03 November 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 October 2020 cash rate decision.

September
HOLD
October
HOLD
Current and expected conditions warrant a downward shift. The RBA is a long way from its goals and wants to move towards them
 
September
HOLD
October
HOLD
 
September
HOLD
October
CUT
RBA will act to reduce official rates to support what is likely to unprecedented fiscal stimulation to be announced in the Federal Budget - A two-pronged attack to restore the economy to growth
 
September
HOLD
October
CUT
The recovery is gradual and uneven and the RBA’s current forecasts show that it does not expect to meet its employment and inflation objectives in the next two years so further easing is warranted.
 
September
HOLD
October
CUT
The banks have recently priced in another rate drop across various loan products so there is an expectation of further easing, with the budget perhaps providing a conveniently timed distraction.
 
September
HOLD
October
HOLD
No movement for an extended period of time
 
September
HOLD
October
HOLD
While there is some temptation for the RBA to lower interest-rate a little, I think I will wait to see what fiscal measures will be introduced in the budget
 
September
HOLD
October
HOLD
While there is some possibility of a further reduction, this remains unlikely with a focus on the role of fiscal rather than monetary policy to support economic growth. Such a decrease is unlikely to have a meaningful impact on growth at this point and would limit any future expansionary fire power.
 
September
HOLD
October
HOLD
Too many unknowns at present to give much indication on the economic outlook and subsequent action from RBA.
 
September
HOLD
October
CUT
Having said they wouldn't go below 0.25% they now seem to be suggesting they will.
 
September
HOLD
October
CUT
The minutes of the last Board meeting, and public comments by both the Governor and the Deputy Governor in recent weeks, suggest that the RBA is coming around to the view that there is more that it can do to support economic activity and employment, and to ensure that inflation eventually returns to the target band - and that it should do it.
 
September
HOLD
October
HOLD
NO point in dropping or raising - so no movement
 
September
HOLD
October
HOLD
Whilst it might be tempting to reduce the cash rate, any reduction now would have little economic benefit and there would be no room to move if rates needed to be reduced during the next six months. A wait and see approach would be the prudent course of action to take for now.
 
September
HOLD
October
HOLD
The RBA has repeatedly signaled an interest to cut the cash rate again, however it makes sense to wait until after the Federal budget is presented.
 
September
HOLD
October
HOLD
There is little, if anything, to be gained from one final rate cut given the Bank-Bill Swap is already at 9bps
 
September
HOLD
October
HOLD
The RBA appear ready to add further monetary support by cutting the Official Cash Rate to 0.1 % although they will probably wait until Cup day (rather than Federal Budget day). Fiscal support will be more critical and effective than monetary, but the RBA are playing their part, including via more QE.
 
September
HOLD
October
HOLD
The biggest risk to recovery in coming quarters will be an appreciating exchange rate should significantly higher government spending be unveiled in the 2020-21 federal budget. International capital inflow reflecting foreigners buying bonds issued to fund the budget deficit strengthens the exchange rate, other things equal, as any good macroeconomics textbook tells us. Further debt monetisation (printing money) by the RBA will offset this pressure but continue to cause asset price inflation. In the longer term (18-24 months away) goods and services inflation would normally accelerate as the economy rebounds.
 
September
HOLD
October
HOLD
The RBA might drop the cash rate to 0.1 per cent but may hold off until after the Budget on Tuesday.
 
September
HOLD
October
HOLD
 
September
HOLD
October
HOLD
Globally funds are being stretched. Once the Pandemic is under control rates will increase
 
September
HOLD
October
CUT
The Bank seems to be coming around to our view that the pandemic will result in a sharp slowdown in wage growth and inflation. we think that announcing more support alongside the Budget would send a strong “Team Australia” message and have pencilled in a cut in the cash rate target, the 3-year yield target and the TFF interest rate to 0.10% at the Bank’s October meeting. We also expect the Bank to announce more bond purchases next week.
 
September
HOLD
October
HOLD
Despite indicating that they are in favour of further easing of monetary policy, it's unlikely the RBA will do this be reducing the cash rate further and will look to other measures, like quantitative easing, to achieve their objectives.
 
September
HOLD
October
HOLD
RBA has signalled it will reduce rates - could be this meeting but more likely next, depending on budget settings.
 
September
HOLD
October
HOLD
I think that monetary policy has had all the effect it will.
 
September
HOLD
October
HOLD
Although a case could be made for a cut this month I think the RBA will keep the cash rate unchanged at its October monetary policy meeting. Board members will wait to digest the Federal Budget announcement before making their next move.
 
September
HOLD
October
HOLD
 
September
HOLD
October
HOLD
The RBA will not take any information at this stage but will maintain its current course. Probably hoping like many of the rest of us that appropriate fiscal measures are followed.
 
September
HOLD
October
HOLD
While there is a lot of talk about the RBA easing this month or next I believe they need to keep some powder in the keg. I would argue that further monetary policy easing will potentially be needed when a lot of the economic support measures such as JobKeeper, JobSeeker and mortgage holidays are ended in early 2021.
 
September
HOLD
October
HOLD
The Bank has flagged that a rate cut is under active consideration. I suspect that they will not want to do this on budget day.
 
September
HOLD
October
HOLD
The central bank will move at some stage to reverse its longhand view that another cut wasn't required, because it is required.
 
September
HOLD
October
HOLD
The cash rate is at its effective lower bound, and will remain that way until at least 2022.
 
September
HOLD
October
HOLD
The RBA has raised the possibility of taking the cash rate lower, but this would be a move of less than 25 basis points. We expect the first rate rise will not be until the end of 2023.
 
September
HOLD
October
HOLD
The RBA has signaled that it is considering easing policy further in the near term. On balance it will likely wait until after the budget to do this as it will be hoping that fiscal largess that is expected will be enough to prevent it from having to do anything.
 
September
HOLD
October
HOLD
 
September
HOLD
October
HOLD
For the foreseeable future, stimulus is likely to be provided through bond acquisition.
 
September
N/A
October
HOLD
RBA signalling a cut soon
 
September
N/A
October
HOLD
Political pressure A cut to 0.1% will make very little economic difference
 
September
N/A
October
HOLD
Signs of the RBA looking to increase interest rates could appear in late 2021 and a lift in interest rates as early as the first quarter of 2022. There is now a more optimistic outlook for the global and Australian economy and it’s possible that recovery will be more rapid. The OECD has recently revised its global forecast from a 6% contraction in 2020, to 4.5%. The expectation is for positive growth throughout 2021, at around 5%. The IMF expects the same, with initial estimates of a 5% contraction in global GDP likely to be downgraded when they release their update on the 13th October. Australia will have more ground to make up, but with sufficient fiscal stimulus focussing on both short and longer-term productivity gains, there is every possibility that we could be out of the woods sooner than expected. Significant new virus outbreaks could set this trajectory back.
 
September
N/A
October
HOLD
re-normalise rates as the economy gradually recovers
 
September
N/A
October
HOLD
RBA unlikely to decrease cash rate below 0.25 per cent given this is already the effective lower bound and given their distaste for negative rates. So next move will be up, but not for years. In the meantime, state/territory/corporate/longer term rates can be decreased by further QE and term funding facility can be/has been expanded.
 

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.

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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

Read more on this topic

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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