The Reserve Bank of Australia published minutes of its August Monetary Policy Board meeting, showing members unanimously kept the cash rate target at 4.35% after considering a 25-basis-point increase. The Board judged that financial conditions had become somewhat restrictive following three rate increases in 2026 and that the current setting was gradually bringing demand and supply into balance, allowing more time to assess incoming data. Inflation remained too high and the staff assessed risks as tilted to the upside, including from the Middle East conflict, stronger pass-through of cost pressures, AI and data center investment, resilient domestic demand and weak productivity. Trimmed mean inflation was forecast to remain above 3% until mid-2027 and reach about 2.5% in late 2027. Several members considered further tightening quite possible if upside risks materialize, while others saw scope for downside risks to offset them. The Board also supported the Australian Prudential Regulation Authority’s position of leaving macroprudential settings unchanged.
2026-08-25Reserve Bank of Australia
Reserve Bank of Australia minutes show unanimous 4.35% rate hold as Board weighs upside inflation risks
Reserve Bank of Australia minutes show the Board unanimously held the cash rate target at 4.35% after considering a 25-basis-point increase. Members judged policy was somewhat restrictive but remained alert to upside inflation risks, with several seeing further tightening as possible.