RBA makes unanimous August cash rate decision

The Reserve Bank of Australia has made its fifth cash rate decision of 2026.

Following its decision in June to hold the cash rate at 4.35 per cent, the Reserve Bank of Australia has today (11 August) decided to again hold the cash rate, as headline inflation endures.

According to the RBA board, “the disruption to global oil supply is adding directly to inflation, and there are indicators that higher fuel prices are being passed through to prices of other goods and services, so inflation is likely to remain high for some time”.

“This inflation impulse is in addition to the effect of capacity pressures in the economy,” it said.

It further explained: “The board remains focused on ensuring that high inflation does not become embedded. To achieve this, growth in aggregate demand needs to remain subdued to reduce capacity pressures and bring inflation back to target. Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected. But inflation is still too high. It is not expected to return to around the midpoint of the target range until late 2027, and there are upside risks to this projection. With monetary policy judged to be somewhat restrictive, the board decided to leave the cash rate target unchanged while it assesses how the economy is evolving. The board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise.

“Accordingly, the board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Monetary policy is well placed to respond to developments, and the board is focused on its mandate to deliver price stability and full employment.”

The decision follows three consecutive rises in February, March, and May, taking the rate from 3.6 per cent to the current 4.35 per cent.

The RBA’s next cash rate decision is set for late September.

Want to see more stories from trusted news sources?
Make HR Leader a preferred news source on Google.