These graphs show movements in the official cash rate over time and changes to the market's lowest home loan rates over the same period. You can see how the market responds by raising or lowering rates broadly in line with the RBA's decisions.
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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.
Based on recent comments by the RBA Governor, the above target inflation rate, excessive federal government spending and demand exceeding supply for goods and services, I see no other option but for the RBA to lift rates now to help dampen demand. Further, it would not be prudent for the RBA to wait until May (there's no meeting in April) to see if inflation is moderating. There is no indication that it will and so there is no reason not to increase rates now, rather than wait until economic and financial matters become even worse.
Geopolitical tensions and the resulting disruption to global oil supplies are placing upward pressure on energy prices, increasing both actual inflation and inflation expectations. At the same time, Australia's labour market remains notably tight, with unemployment at low levels and wage growth persisting, while consumer spending has only softened marginally despite higher borrowing costs. These dynamics suggest that inflationary pressures may prove more persistent than previously anticipated. Given this outlook, the Reserve Bank of Australia may feel compelled to raise the cash rate further to prevent inflation from becoming entrenched and to ensure that long-term expectations remain well anchored.
The RBA will raise rates later in 2026 to lower inflation, but it will wait for the full March quarter CPI data and to see how the Middle East war affects inflation, inflation expectations and growth.
Given the RBA's latest forecasts for inflation - which prior to the outbreak of war in the Middle East I thought were a little too bearish, but it's their forecasts which matter for monetary policy decisions, not mine - they will almost certainly need to move monetary policy further into restrictive territory in order to be able, credibly, to forecast 'underlying' inflation returning to the target band in an acceptable time frame.
Rather not! I don't know! What do you think? According to my forecasting system, the cash rate is set to hold steady. Despite the forecast mean being on a clear upwards trajectory, the forecast intervals include the current cash rate value decisively. I'm sticking with my call: HOLD! My forecasts are available at: https://forecasting-cash-rate.github.io/
The CPI released in February showed that core inflation for the 12 months to January was 3.4%, still above the 2-3% target band. In addition, the conflict involving Iran has pushed up oil prices, which could add further inflation pressure through higher fuel costs. It is hard to tell at the moment whether there will be another increase in May, as the board will likely wait to see more data and how these developments affect inflation.
Recent commentary from the RBA has been explicit that this meeting is live. There's also been the clear suggestion from Deputy Governor Hauser that he favours a hike. The RBA seems to want to pull out of the market at least two of the cuts from last year. There's an argument that the central bank has time to wait and read the play for a little longer. But inflation does appear to be tracking above forecasts and that seems to be inspiring urgency.
It is best to wait it out this month, but if by next month it's clear we're in for higher oil prices for a while, then inflation becomes a worry. Further down the track the global economy will slow in response and at that point, rates will be lowered.
I suspect the RBA will raise the cash rate. There are several reasons, including the risk of inflation expectations drifting upward the longer that inflation is above target, and the additional inflationary pressure that is likely to come from energy market disruptions associated with the conflict in the Middle East.
Recent data on actual inflation, expected inflation (both survey data and breakevens), the labour market and gross domestic product all indicate the Bank will probably hike this month. Failing that outcome, the Bank should hike in May. In either event, there should be a further rise in the second half of this year.
Inflation is still too high for the RBA, but after lifting rates in February and with uncertainty around global conflicts, the bank should wait for the impact of recent events to become clearer. For the property market, this means conditions should remain steady. New listings have risen, but steady demand should continue to support price growth, particularly at the more affordable end of the market.
The sharp rise in oil prices given the conflict in the Middle East will feed through to higher inflation than previously expected over the next 12 months. The RBA might have previously held off on a second rise in the cash rate until more quarterly inflation data came in. But they are likely to raise rates this meeting to show a response to upcoming inflation pressures due to the oil price spike. Assuming Q1 inflation comes in higher than forecast, they will also likely raise rates at the May meeting. After that, it will be very data dependent. If the oil price spike is followed by a global recession, the RBA would obviously start cutting rates. But if oil prices fall quickly after a faster than expected resolution of war in the Middle East, then the RBA would let the hikes in February, March, and May work through the economy. If the inflation forecasts get significantly higher without as much weakening of the real economy, then the RBA is likely to raise rates further in future meetings later this year.
With so much uncertainty in relation to global conflict and energy prices increasing on the back of restricted supply, it is challenging to see interest rates shifting until further clarity is forthcoming on this global issues.
This column is being written at a time of war, with clear indications that the disruption will affect commodity prices, including oil. This is bound to have an inflationary effect on Australia, as it will in most other countries. But in my view, this is no time for the Reserve Bank to be raising interest rates. There's no point making Australian householders pay more on their mortgage to combat inflation that is not of this country's making. The prudent course would be to hold rates steady and wait until at least the next meeting to see how events unfold.
The RBA are likely to continue their tightening cycle this year especially with the intensifying conflict in the Middle East adding further to inflationary risks, although I suspect they will hold in March and await more data and overseas developments. We see the next hike in May.
The decision for May will remain highly dependent on the inflation data and whether the RBA board sees clear evidence that inflation is moving sustainably toward its target band. While the Australian economy has demonstrated resilience in the past, ongoing global tensions could still pose risks to the outlook.
Fuel prices and supply chain disruption from Middle East will likely keep inflation higher for longer, ultimately this will mean higher rates and giving back cuts from last calendar year.
The direction of interest rates over the next year is still uncertain, because the Reserve Bank is trying to balance two competing forces - stubborn inflation on the one hand and rising global uncertainty on the other. Inflation has proven stickier than expected, still running above the RBA's 2-3% target band, and may take several years to return to the midpoint sustainably. At the same time, geopolitical tensions overseas are pushing up energy prices, which can feed into inflation through higher transport and production costs. Oil shocks historically act like a tax on the global economy. They push prices higher while slowing economic growth. So the Reserve Bank is in a tricky position. If inflation remains persistent, we could see another small rate rise. But if global instability slows economic growth, the RBA may instead pause and wait to see how things play out
Rising long-term inflation expectations among businesses and households risk becoming entrenched above the Reserve Bank of Australia's target. While this could justify modest cash-rate increases this year, the RBA may like to wait given the uncertainty over how the Middle East conflict will affect oil prices, inflation and output.
We expect that the RBA will raise rates again at its March meeting reflecting concerns about a further boost to inflation and inflation expectations as a result of higher energy prices flowing from the US/Israel war with Iran at a time when inflation is already above target.
Petrol prices will rise from the war in the Middle East, which will increase the CPI further beyond the 2-3 per cent range. The RBA will succumb to pressure to increase the cash rate.
Uncertainty rules at the moment. The war in the Middle East is impacting oil prices in the immediate term but has the potential to cause economic damage too. We think the sensible path is to hold rates steady until a clearer picture emerges.
Inflation has been higher than expected for longer than expected. I think the RBA will want to take out insurance to prevent future upward pressure on prices. They can achieve this by increasing the cash rate.
It's clear there are inflation pressures in the economy, but the RBA would be madder than a March hare to raise interest rates this month when we have see-sawing oil prices and stock markets because of the chaos in the Middle East. Better to wait until things settle down and take a sober look at the data after the quarterly inflation numbers come out at the end of April.
In such an uncertain environment, I expect the RBA will hold the cash rate in March. The Board needs more time to assess potential effects from global conflict as well as the impact of the February rate hike. Governor Bullock has been clear that monetary policy decisions must be data driven. But with updated inflation and labor data not published until after this month's meeting, the Board may not have all the information it needs to make a change to the cash rate just yet.
The US and Iran conflict has caused concern of the stability of energy and supply chains, so I expect we may not see inflation go down in the short term.
Inflation is still above target and GDP growth has been stronger than expected. With rising oil prices and global uncertainty, the RBA may consider a further rate increase.
Inflation pressures persist and are potentially exacerbated by both domestic conditions (labour costs) and the ME conflict. Activity growth is solid and the labour market remains in good shape.
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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.
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.
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.
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.
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.
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 cut will impact your home loan repayments
Enter your loan amount, current interest rate and the latest cash rate change to quickly estimate how much your monthly repayments will change, and what your new repayment will be.
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
Lenders are free to change interest rates on their products whenever they want. The cash rate is a big influence on rates, but there are many other factors. This includes a lender's own funding costs, the amount of deposits the lender has and how competitive it wants to be to attract new customers.
The RBA changes the cash rate target based on 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.
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.
The RBA's board of governors meets 8 times a year, in February, March, May, June, August, September, November and December. It is here that the board makes a decision on the official cash rate target.
The board used to meet 11 times a year, on every first Tuesday of the month apart from January. It lessened the number of times it meets to provide more time for change between meetings.
However, the RBA can alter the cash rate at any time outside of the meetings. This is rare, but can happen. In March 2020, in response to the onset of the COVID pandemic, the bank cut the cash rate twice. Once at the scheduled meeting and then again mid-month at a special emergency meeting.
Check out more RBA news and Finder's RBA survey press releases
Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University.
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What do you think will be the next move for RBA on cash rate and when?
Thank you!
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.
Thanks Jonathan, I meant in the longer term, 6-12 months.
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
JulieSeptember 1, 2016
When do you think the RBA will start raising rates?
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
EricFebruary 25, 2016
Hi Belinda
Appreciate if you would also send me informations regarding findings of monthly RBA survey.
Regards
Eric
BelindaFebruary 26, 2016
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
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
BelindaDecember 9, 2015
Hi Syed,
Thanks for your enquiry.
The best time to sell your property relies on plenty of other factors that you need to consider before selling your house. Our guide to find out when really is the best time of year to sell your house might be handy for you.
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.
BelindaAugust 17, 2015
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.
A rate cut appears imminent, and not just one, according to a new poll from Finder.
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What do you think will be the next move for RBA on cash rate and when?
Thank you!
Hi Rob!
Thanks for the comment.
As of the moment, most of resident rate experts predict that rates will be the same. The cash rate target is released on the first Tuesday of every month except January.
You can follow the updated RBA forecast through our website.
Hope this helps.
Cheers,
Jonathan
Thanks Jonathan, I meant in the longer term, 6-12 months.
Hi Rob!
We appreciate your follow-up.
Currently, there are multiple factors that need to be considered and due to the volatility of these factors, it is a bit hard to conclude whether they’ll leave the rates unchanged for the next few months or not.
If you have further inquiries, you may contact:
Media and Communications
Secretary’s Department
Reserve Bank of Australia
SYDNEY
Phone: +61 2 9551 9720
Fax: +61 2 9551 8033
Email: rbainfo@rba.gov.au
Hope this helps.
Cheers,
Jonathan
When do you think the RBA will start raising rates?
Hi Julie,
Thank you for contacting finder.com.au we are a financial comparison website and general information service.
It is hard to predict the movement of the cash rate as it is based on a multitude of factors that are continually changing however 7 out of the 38 experts we surveyed in our latest RBA survey for September 2016 said they predict it will start going up in July 2017 or beyond.
Regards
Jodie
Hi Belinda
Appreciate if you would also send me informations regarding findings of monthly RBA survey.
Regards
Eric
Hi Eric,
Thanks for getting in touch.
On this page, you can view the RBA Cash Rate Target Announcements for each month from February 2015 until February 2016. You can also view the commentary of our resident rate experts in the lead up to each Board meeting which occurs on the first Tuesday of every month (except January).
Please feel free to sign up to receive our detailed RBA cash rate updates by completing the form provided above.
Regards,
Belinda
Hi,
My new house is ready now and wondering what is the best time to sell, should I put my house in the market now or January or wait for the February. I am not committed any where so I can wait.
Your advise needed.
Thanks
Hi Syed,
Thanks for your enquiry.
The best time to sell your property relies on plenty of other factors that you need to consider before selling your house. Our guide to find out when really is the best time of year to sell your house might be handy for you.
You can also refer to a guide on everything you need to know before you sell your house on this page. You can also speak to a real estate agent for assistance.
I hope this helps.
All the best,
Belinda
hello.
i wonder if i could receive some information regarding not only the latest current economic situation, but also cash rate movements over the year.
Hi Dongho,
Thanks for your enquiry.
Above on this page you can view the ‘Reserve Bank monthly announcements’ to read about the cash rate movements and monetary policy decisions that have occurred over the course of this year. You can also sign up to receive our RBA cash rate updates by filling in the form provided above.
In regards to the current economic situation, finder.com.au is an online comparative website and we can’t comment on the activity of the broader Australian economy.
Thanks,
Belinda