Reserve Bank reveals March 2026 cash rate decision

The Reserve Bank of Australia was widely tipped to increase the cash rate at its March 2026 meeting. Find out here whether the cash rate has been hiked, held, or lowered.

At its first meeting for 2026, the board of the Reserve Bank of Australia increased the cash rate by 25 basis points, to 3.85 per cent. Today, it has again increased the cash rate by 25 basis points, taking it to 4.1 per cent.

In a statement, the board said that while inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.

“Information since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures. In addition, the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation. Short-term measures of inflation expectations have already risen. As a result, the board judged that there is a material risk that inflation will remain above target for longer than previously anticipated,” the board said.

“Higher capacity pressures reflect, in part, the greater momentum in demand in the latter part of 2025. Growth in private demand strengthened substantially more than was expected in mid-2025, although the composition of that growth surprised in the December quarter. Business investment was above expectations, and consumption was below expectations. Meanwhile, growth in unit labour costs declined. More recently, the unemployment rate has been a little lower than expected, and measures of labour underutilisation remain at low rates. Activity and prices in the housing market grew strongly over the past year, although housing price growth moderated somewhat at the start of 2026.

“Financial conditions have tightened a little this year, but the extent to which monetary policy is restrictive is uncertain. Credit is readily available to both households and businesses, and the effects of interest rate reductions in 2025 are yet to flow through fully to aggregate demand, prices and wages. The exchange rate, money market interest rates and government bond yields have risen over the past month. In large part, higher interest rates reflect expectations for the path of monetary policy, which have risen in Australia and most other advanced economies in response to the expected inflationary implications of the conflict in the Middle East.”