The official cash rate is 4.35%. 97% of Finder's economists and experts predicted the RBA's June decision to hold the cash rate.
Key takeaways
The official cash rate is 4.35%. The Reserve Bank decided to hold the cash rate at its June meeting.
97% of Finder's experts correctly predicted today's decisions.
The Reserve Bank meets again on 11 August 2026 to set the benchmark interest rate.
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.
How often are Finder's expert predictions correct?
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 current inflation figures the expected reaction from the RBA would be to increase rates. But I don't think this will happen because the highly unpopular recent Federal Budget is contractionary. This coupled with increasing unemployment and general economic malaise will likely see the RBA hold rates for now.
Monetary policy is now clearly in 'restrictive" territory; "headline" inflation was a bit lower than expected in April, and the labour market softened a bit more than expected. None of that rules out further rate increases at some point, but it does reduce the need for a 4th consecutive rise. They can now "wait and see" what the data brings.
I believe we’re all set on the RISE! My forecasting system predicts this decision with a record-high 88 per cent probability, reflecting market expectations in light of the latest developments. All models indicate this decision, with the bond-yield curve models suggesting a more hawkish approach, and univariate models of the cash rate target setting on a moderate increase. If this prediction materialises, this would be the highest level of interest rates since October 2011. And there is one person to blame for this state of affairs :) My forecasts are available at: https://forecasting-cash-rate.github.io/
I expect the RBA to leave the cash rate unchanged at its meeting next week. First, the Bank has already raised interest rates three times this year, so it is appropriate to pause and assess the cumulative effects of those earlier increases, which work with a lag. Second, the latest GDP figures released last week were weaker than expected, suggesting that economic activity is softening. Taken together, these factors reduce the urgency for another rate hike and support a wait-and-see approach.
Signs of softening growth and a weakening labour market is likely to see the RBA take a "wait and see" approach to policy as the impact of previous hikes work through the economy.
Their previous rise signalled their preparedness to act. But, against the momentum and AI investment tailwinds, there are gathering headwinds making it wise to pause.
I think the RBA is likely to hold the cash rate constant at the June meeting. This will provide an opportunity to assess the degree to which the economy is softening in the wake of recent rate hikes and global events.
The latest data on the labour market, GDP and confidence reveal a marked weakening of economic activity. On the other hand, inflation remains well above target. The Bank will probably hold, flagging that it is in ‘wait and see’ mode.
I expect the RBA to hold. Inflation is still too high, but the economy is losing momentum, the labour market is starting to soften and households have pulled back spending. That mix should keep the RBA on pause while it waits for the impact of higher rates to flow through. For the property market, momentum has cooled. Higher rates are still capping borrowing capacity, and investors are more cautious as the Budget changes get digested. Price growth is moderating
Having raised at the last three meetings, the RBA is likely to continue seeing policy as sufficiently contractionary unless some new shock occurs before the meeting. The budget, while problematic for long-run productivity growth, was relatively neutral in terms of short-run macroeconomic conditions. So the RBA is unlikely to see that as an impetus for a further increase.
Unemployment has increased - after a series of increases in the cash rate, it would be prudent to hold. Inflation driven by supply shocks beyond Australia’s control requires a different policy solution than monetary policy.
I think it's a line ball call. But there is certainly a growing sense of pessimism in Australia. With the reduced activity in the property sector, I think the wealth effect will start to be a factor here. That simply means that when the shares or property drop, people feel poorer and they spend less. Furthermore, the war in Iran is still at a stalemate with the potential of longer delays and possible fuel prices increases. I don't think a rate rise is necessary at the moment to subdue demand
The RBA will maintain its tightening bias this month but don't need to increase the cash rate again after three consecutive hikes. The outlook remains at the mercy of developments in the Middle East and the oil price, but the next hike may not occur until around November.
After three rate hikes within the first half of the year, the RBA board could keep the cash rate on hold in June as evidence of an economic slowdown and a cooling job market begins to show. However, the worst may not be over for homeowners as global political tensions could mean uncertainty later in the year.
Inflation is still elevated but not accelerating at the rate expected. The increase to unemployment rate also suggests less need to raise rates this month.
With unemployment edging higher, inflation continuing to ease, and global trade tensions keeping business confidence fragile, the case for another rate rise has essentially disappeared. The RBA will almost certainly hold in June, because the combination of a softening labour market, cooling property prices, and ongoing geopolitical uncertainty means the board has every reason to stay patient and watch the data rather than risk tipping a slowing economy further.
I expect the RBA Board will leave the cash rate unchanged, although members are likely to hold different views on the balance of risks. Inflation remains elevated, but a material share appears to reflect external cost pressures associated with the Middle East conflict, particularly through higher energy and related input costs. Higher relative energy prices are the mechanism by which demand adjusts to constrained supply; this first-round price level effect does not necessarily imply a sustained acceleration in broad inflation, provided second-round effects (wages, margins and inflation expectations) remain contained. Domestic conditions suggest caution. The economy is losing momentum: unemployment rose to 4.5% in April, Q1 GDP growth was 0.3%, and measured labour productivity declined. Given the lags in monetary policy transmission, it is plausible that the three cash rate increases in 2026 are still working through demand and pricing behaviour. Further tightening now could deepen the slowdown when it is still too early to judge whether inflation will remain elevated once the external shock fades. On the demand side, recent strength in investment has been significantly driven by data centre construction, which is likely to lift productivity growth over time. While this spending adds to near-term activity, its supply-enhancing nature reduces the case for additional monetary restraint at this meeting.
The three RBA rate hikes this year have given the RBA some breathing space to wait and gauge the initial impact of the hikes and how the oil supply shock impacts. Recently softer data for consumer spending, jobs and house prices along with mixed inflation data for April add to the case for a pause on rates hikes at the June meeting.
The recent rises are beginning to bite and at the individual household level, the rising cost of living is a major concern. We may not be at the end of the rise cycle but a reprieve is needed now, which will ideally remain for the rest of the year.
After three cash rate increases in a row, I think the RBA will take a wait and see approach this month. Inflation remains high but the labour market is softening and there is uncertainty about the conflict in the Middle East.
While it's clear that now is Australia's winter of discontent, I think the RBA will be waiting to see how the impact of the budget tax changes to investing will affect the property market and the broader economy. Economic growth was also pretty weak - apart from the big AI-fueled data centre rush and unemployment was also a bit higher than expected. I think all this means the RBA will keep rates on hold in June
Although inflation continues to rise above the RBA target range, rising jobless and falling economic growth are now pushing against further rate rises in the shorter term with the Bank likely to now take a wait and see approach on monetary policy as indicated in previous meeting commentary.
It takes time for interest rate changes to be fully understood. I expect the Reserve Bank will keep the cash rate on hold this month, giving the Board time to assess the impact of the three consecutive hikes already delivered this year.
Inflation figures fell in April, but are still above target. I think the RBA would be loath to lower rates on this, especially after raising them at their last meeting.
Inflation is still above target, but the economy is also showing signs of slowing, with weak GDP growth and rising unemployment rate. Given the three recent cash rate hikes, the RBA may prefer a wait and see approach at the upcoming meeting.
After 3 hikes in 3 meetings this year I believe the RBA has now bought themselves some time to see how the economy and inflationary pressures proceed from here.
The RBA is will likely to keep the cash rate on hold in June, allowing the impact of its three recent rate hikes to fully flow through the economy. The Board is likely to maintain its current policy stance and monitor upcoming inflation data before making any further decisions.
We think the RBA will keep rates on hold in June. While an August rate hike is a risk, we think the activity side of the economy is slowing and will justify the RBA keeping rates at 4.35%
House price rises were a big factor in our CPI going up and now with the budget and 3 rate rises house prices are now under preassure. I also think after 3 rate rises they will pause to assess the impact and recent inflation data was softer plus we are likely to see a resolution to the Iran War which will soften upward preassure on energy prices.
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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.
Over the last few years the RBA has lifted the cash rate very quickly to combat inflation, with a few cuts in between.
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.
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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At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
CuteyJune 16, 2022
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Finder
RichardJune 18, 2022Finder
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
octoJune 18, 2018
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
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
TaneeshaMay 24, 2018
Do you think the cash rate will stay the same at the June RBA meeting?
Finder
JoshuaMay 24, 2018Finder
Hi Taneesha,
Thanks for getting in touch with finder. I hope all is well for you. :)
Unfortunately, we are not in the best place to make a prediction. However, you might get an idea whether the RBA cash rate will rise or fall by looking at the factors that affect it. These factors may include:
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
BrookMay 5, 2018
What do you think that how the international economic condition influence the cash rate?
Finder
JeniMay 6, 2018Finder
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
A rate cut appears imminent, and not just one, according to a new poll from Finder.
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when will rates increase
Hi Mark,
At this stage it’s impossible to say. The outlook for the moment is for rates to either fall slightly further or stay where they are, over the next 6-12 months.
Beyond that we just don’t know. For rates to start rising we’d need to see a big increase in inflation at least.
When the RBA decreases the cash rate , does it mean it prints more money to increase money supply and thereby decreasing the borrowing rate. And if that is the case, does increasing the cash rate mean that the RBA has to extinguish some of the money supply thereby reducing the money available to borrow. I am assuming that RBA can’t just simply say the cash rate is this much, it has to increase/decrease money supply at the backend to make sure the cash rate stays at whatever level it wants to stay at.
Hi,
The cash rate determines the interest rate lenders can charge when lending money to each other at short notice (also called the overnight cash rate). Lenders and banks are always moving money around to cover different investments and expenses, including funding for home loans.
So the cash rate affects their costs, and they pass this onto borrowers. Changing the cash rate target does nothing to the amount of money in the economy. It affects the cost of borrowing and lending money.
The RBA does in effect create money sometimes, in a process called quantitative easing. This involves purchasing bonds from investors at a favourable rate, freeing up investor cash to go elsewhere in the economy. This is different to the cash rate.
I hope this helps.
Regards,
Richard
how long can AUD interest rate remain Low…..?
how soon will the AUD follow the US FED Rate Hike…….?
thank you
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
Do you think the cash rate will stay the same at the June RBA meeting?
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
What do you think that how the international economic condition influence the cash rate?
Hi Brook,
Thank you for getting in touch with Finder.
This is a nice question. Domestic financial conditions remain expansionary. There has been some tightening in short-term
money markets, which has flowed through to a small increase in funding costs for a range of financial institutions and businesses. However, borrowing rates remain low for households and businesses. Growth in housing credit has eased since mid last year, particularly for credit extended to investors, while growth in business debt has remained moderate. The Australian dollar remains within its narrow range of the past two years. Financial market prices suggest that the cash rate is expected to remain unchanged this year and to increase around mid 2019. If you are eager to learn more about the domestic financial condition according to RBA, refer to the Domestic Economic Conditions file.
I hope this helps.
Have a great day!
Cheers,
Jeni