RBA Cash Rate forecast from 40+ experts March 2021 | Finder

RBA cash rate

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

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hold

0.10%

CASH RATE HOLD

RBA decision made 02 March 2021

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  • 100% of our experts correctly predicted the RBA would hold the cash rate at its meeting on 02 March 2021
  • The official cash rate remains at the historic low of 0.10%
Next rate meeting: The board of the Reserve Bank meets on 06 April 2021 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 March 2021 cash rate decision.

February
HOLD
March
HOLD
While the economy has recovered faster than expected, the RBA is still a long way away from meeting its inflation and employment goals so a rate hike is still a long way away. That said the faster than expected recovery will likely see the first hike occur earlier than the RBA's expectation of no hike before 2024. It could come late next year or early 2023.

February
HOLD
March
HOLD
The economy appears to be recovering faster than expected but the RBA has doubled down on its view that rates will remain low for some time to come. This stated unwillingness to tinker with rates will provide confidence to home buyers and continue to support rising property prices in the near term.

February
HOLD
March
HOLD
Inflation is likely to pick up sooner than the official family thinks.

February
HOLD
March
HOLD
The RBA will wait for unemployment to fall wages to rise and inflation to fall within its desired range before it raises rates

February
HOLD
March
HOLD
It will be a long time before we raise rates

February
HOLD
March
HOLD
Because they have said so explicitly (“2024 at the earliest”) although I am surprised they haven’t left themselves some “wriggle room” for the (non-trivial, as I would see it) possibility that the unemployment rate falls to less than 5% before then

February
HOLD
March
HOLD
I am sure they won't go up – and doubt they will take them down any more at this stage

February
HOLD
March
HOLD
The RBA has strongly indicated that interest rates will remain at their current levels for the foreseeable future and there has been no economic data to suggest otherwise. We’ll need to see the impact of the end of Jobkeeper in March, but if the economic recovery continues on it current recovery trajectory, it is highly likely we’ll see interest rates begin to rise early next year.

February
HOLD
March
HOLD
The official cash rate should start to rise by 2023. The welcome recovery for jobs is evidence that monetary policy has combined effectively with fiscal and health policies, so assuming the vaccine rollout goes smoothly, this recovery can build pace through 2021.

February
HOLD
March
HOLD
Global economic activity will pick up as countries are vaccinated. Given the expansion in money supplies other things equal this will put upward pressure on inflation. Otherwise macroeconomics textbooks need to be rewritten. At the same time record breaking levels of public debt worldwide will continue to exert upward pressure on bond yields.

February
HOLD
March
HOLD
The RBA has indicated it won't change the cash rate until inflation is well into the 2-3% range and unemployment is low.

February
HOLD
March
HOLD
RBA have said Rates on on HOLD for next 3 years!

February
HOLD
March
HOLD
global money is at an all time low

February
HOLD
March
HOLD
While we are upbeat about the economic outlook the RBA has announced it will extend its asset purchases when they end in April and we think they will extend again through to the end of 2021.

February
HOLD
March
HOLD
Recent statements by the RBA suggest that they will continue to hold rates at their current level until the economy strengthens.

February
HOLD
March
HOLD
The RBA has already indicated that it is unlikely to lift rates before the end of the year.

February
HOLD
March
HOLD
I expect the RBA to continue to hold the cash rate. Economic indicators reveal a strong bounce back in the domestic economy. The housing market is booming, fuelled by an extremely low interest rate environment and fiscal stimulus. Unemployment has recovered from its Pandemic peak and consumers are confident. The rollout of the COVID-19 vaccine will bolster consumer confidence in the months ahead. All these factors would encourage RBA Board members to maintain the cash rate at its record low for the foreseeable future.

February
HOLD
March
HOLD
I believe a period of stable interest rates is required to provide confidence and stimulate growth

February
HOLD
March
HOLD
Based on the RBAs guidance I see no reason why they would change direction and cut rates and no sign they will lift rates any time soon.

February
HOLD
March
HOLD
There will be bumps in the economic recovery that will prompt the central bank to keep rates on hold for the next two years as they watch for inflationary pressures.

February
HOLD
March
HOLD
Although it is unlikely the RBA will increase rates until the jobless rate falls below 5%, it may be prudent to at least consider a tightening policy prior to achieving that rate to provide capacity for traditional monetary policy initiatives.

February
HOLD
March
HOLD

February
HOLD
March
HOLD
Although the labour market is improving and global commodity prices are lifting headline inflation, full employment remains a long way off. Until then, wage growth will remain tepid and underlying inflation will be weak. The RBA will keep rates at 0.1% until the unemployment rate gets to 5%, which is at least two years away.

February
HOLD
March
HOLD
The RBA have been explicit that they don't expect to raise the cash rate until 2024. Their hand may be forced a little sooner than that, but the first rate hike is still a couple of years away.

February
HOLD
March
HOLD
Whilst the vaccine roll out is now underway, I think our economic recovery will be slow as many industries will not get back to full speed for quite some time.

February
HOLD
March
HOLD
Inflation

February
HOLD
March
HOLD
The pace of the recovery appears to be quickening such that the pre conditions set by the RBA for a rate increase may occur earlier than their 3 year horizon.

February
HOLD
March
HOLD
RBA has now clearly flagged no rate increases this year or next. Despite the debate over expansion of QE the RBA is rightly resisting, given the limited impact of further QE and already existing distortions.

February
HOLD
March
HOLD
The RBA has absolutely no justification based on the current economic environment to wind back any of its stimulus measures. I don't expect it will contemplate such moves until the unemployment rate is at or below 5%

February
HOLD
March
HOLD
Uncertain recovery

February
HOLD
March
HOLD
Another 12 months plus of stimulus/monetary policy support is likely to be needed. All going well with the vaccine, global macros and confidence, the second half of next year may see the winding down of this.

February
HOLD
March
HOLD
2021 looks likely to see a reflation move that sees the end of RBA yield curve management and sets the stage for a review of the existing ultra-low rate environment.

February
HOLD
March
HOLD
There’s an increasing prospect of interest rates being lifted earlier than the 2024 timeline that the RBA has offered up in recent statements. This could be as early as the second half of 2022 if the labour market continues to respond and prices continue to push upwards - particularly through the housing market. Whether this activity will be enough to reach the 2% inflation threshold will remain to be seen, but it’s certainly more likely now than it was a month ago.

February
N/A
March
HOLD
Because it will take considerable time for wage and price inflation to be high enough for the RBA to raise rates.

February
N/A
March
HOLD
The RBA forward guidance is clear that the cash rate will not be increased until actual (not forecast) inflation is sustainable within the 2%-3% target range - which they put at 2024.

February
N/A
March
HOLD
Its unlikely that the economy will experience excessive inflationary pressures for some time given the existing conditions.

How has the cash rate changed over time?

The graph below shows the movements in the official cash rate over time and is updated every month whenever the RBA announces a cut, raise or hold.

What is the official cash rate?

The Reserve Bank of Australia is the country's central bank. The RBA's monetary policy has three key objectives which are set out in the Reserve Bank Act 1959:

  • The stability of the currency of Australia.
  • The maintenance of full employment in Australia.
  • The economic prosperity and welfare of the people of Australia.

Setting the official cash rate is one of the bank's key tools to influence monetary policy, inflation and the broader Australian economy. The bank's board meets on the first Tuesday of every month except January to set the cash rate. The RBA will either cut, raise or hold the cash rate.

Their decision is influenced by a range of factors including inflation, the performance of the Aussie dollar, unemployment, the housing market, and Australia's Gross Domestic Product (GDP).

For example, if inflation rises above the target rate it means that Australians are spending their money too freely and prices are increasing too rapidly. But if the RBA raises interest rates to make it more expensive to borrow money, the economy will settle and price increases will slow down. Conversely, the RBA will drop interest rates if inflation is too low and the economy is stagnating, encouraging more Australians to spend more money and stimulate economic growth.

How the cash rate can impact your finances

A lower cash rate means borrowing money is cheaper. That's good news for people with mortgages, especially variable rate home loans, which are directly affected by the cash rate (fixed rate loans, as the name implies, don't change until the fixed period ends).

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

The RBA generally moves the cash rate in increments of 0.25%, though it did make cuts of 0.10% and 0.15% in 2020. The cash rate is currently 0.10%, which is the lowest it has been in several decades.

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

  • The RBA has reduced the cash rate by 0.25%.
  • You have a variable rate home loan.
  • 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

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46 Responses

    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 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

    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

    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

    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

    Default Gravatar
    EricFebruary 25, 2016

    Hi Belinda

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

    Regards
    Eric

      Default Gravatar
      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

    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

      Default Gravatar
      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.

      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

    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.

      Default Gravatar
      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.

      Thanks,
      Belinda

    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

      Default Gravatar
      BelindaJuly 17, 2015

      Hi Oli,

      Thanks for your enquiry.

      I have emailed you with some information regarding the findings from our monthly RBA survey.

      You may also sign up for RBA cash rate forecast and updates.

      Thanks,
      Belinda

    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

      Default Gravatar
      BelindaJuly 8, 2015

      Hi Yazmin,

      Thanks for your enquiry.

      While we are not in a position to forecast interest rates, you can sign up to receive our RBA cash rate updates which you might find useful.

      Thanks,
      Belinda

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