The Reserve Bank of Australia’s Monetary Policy Board voted 5-4 to lift the cash-rate target by 25 bp to 4.10 percent, arguing that the renewed rise in inflation during the second half of 2025, emerging capacity strains, higher fuel costs from the Middle-East conflict and firmer short-term inflation expectations pose “material” upside risks to the outlook. After two 25 bp cuts between May and August 2025 and a 25 bp hike in February 2026, the policy rate is now back at its early-2025 level of 4.10 percent. The implementation framework is unchanged, but the Bank notes that money-market rates, government bond yields and the AUD have all risen, even as credit remains readily available to households and businesses. Domestically, inflation is still well above target, private demand and business investment have out-paced expectations, the unemployment rate has edged lower and unit labour-cost growth has moderated, while housing prices continued to rise—albeit at a slower pace early in 2026. Externally, the Middle-East conflict has driven up global energy prices and could both lift global inflation and weigh on growth in Australia’s major trading partners. The Board will “pay close attention” to global developments, domestic demand, inflation and labour-market trends and stands ready to adjust policy to deliver price stability and full employment.
Reserve Bank of Australia 2026-03-17
RBA raises cash rate by 25 bp to 4.10 %
The Reserve Bank of Australia’s Monetary Policy Board narrowly voted 5-4 to raise the cash-rate target by 25 bp to 4.10 %, reversing 2025’s cuts, citing renewed inflation, capacity strains, higher energy costs from the Middle-East conflict and firmer short-term inflation expectations as “material” upside risks. Policy implementation is unchanged, though market rates and the AUD have firmed, and the Board will closely monitor global and domestic conditions and stands ready to act.