Level 2

RBA leaves cash rate at 4.35%, as expected

By Michele Maatouk

Date: Tuesday 11 Aug 2026

RBA leaves cash rate at 4.35%, as expected

(Sharecast News) - The Reserve Bank of Australia maintained the official cash rate at 4.35% on Tuesday, as widely expected, following three hikes earlier in the year.
The RBA, which pointed to rising unemployment and a weak property market, said its policy decision was unanimous.

"The disruption to global oil supply is adding directly to inflation and there are indications 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," it said. "This inflation impulse is in addition to the effect of capacity pressures in the economy.

"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."

Speaking to reporters after the announcement, Governor Michele Bullock took a hawkish tone, suggesting that it was "quite possible" rates will be lifted if needed.

"It's important people believe that we will act if we need to," she said. "I think personally that it's quite possible we might need to go but we'll wait and see what the data tells us."



Special promo:
Trading the Forex Market? Visit FXmania.com to get advanced infomation about currencies and the Foreign Exchange Market.

« Go back to news channel

..

Email this article to a friend

or share it with one of these popular networks:


Top of Page