The Reserve Bank of Australia (RBA) today announced that it will maintain the cash rate at 3.60%. This decision comes amid widespread expectations that the central bank would take a cautious approach and wait for clearer signs from the economy before making further moves.
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Why the RBA chose to hold
Inflation isn’t out of the woods yet
The RBA continues to note that inflation remains a concern. Underlying inflation is easing but still above target, which sits within the target band of 2–3 %. But the monthly Consumer Price Index (CPI) showed prices rising to 3.0 % in August, up from 2.8 % in July, a reminder that price pressures can still re-emerge.
CEO of Australian Finance Hub Shane Petros says, “The RBA’s decision to hold the cash rate at 3.60% today reflects a cautious approach amid ongoing economic uncertainty. While inflation has eased from its peak, it remains above the target range, and the Board is clearly waiting for more data — particularly on inflation and wages — before making its next move. For borrowers, this pause offers some short-term stability, but with global and local pressures still in play, it’s a timely reminder to review your financial position and ensure you’re well-prepared for any future shifts.”
Jobs market remains firm
While unemployment has inched up a little, it is still relatively low. Many Australians who want work can find it, and wage growth is steady but not excessive. A resilient labour market gives the RBA more room to stay patient without risking a downturn.
Economy holding up better than anticipated
Australia’s economic growth surprised some forecasters. Consumer spending on non-discretionary and discretionary items alike has remained solid. These trends suggest the economy is strong enough to avoid the urgency of a rate cut for now.
Housing risks are back on the radar
Housing activity has picked up, and national home values have increased for seven months straight. Cheap credit can further accelerate property values, which poses risks to affordability and financial stability. By holding rates, the RBA aims to reduce the chance of housing over-expansion.
What this means
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Mortgage repayments stay the same (for now). If you’re servicing a variable-rate home loan, your monthly payments won’t drop just yet.
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No immediate boost to savings returns. Bank interest on deposits is unlikely to rise — and won’t fall — following today’s hold.
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A rate cut later this year is still on the table. If incoming inflation data weakens further and economic growth moderates, the RBA may feel confident enough to cut rates in coming months.
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Stability is the priority. Today’s decision reflects a balancing act by the RBA: managing inflation risk while watching for signs that the economy needs stimulus.
