The Reserve Bank of Australia left the cash rate target unchanged at 4.35% on 16 June 2026, saying headline and underlying inflation remain too high and judging it appropriate to assess the effects of earlier rate increases and the impact of the global oil supply disruption on inflation and activity. After cutting the cash rate to 3.60% in August 2025, the Board raised it by 25 basis points in February, March and May 2026 to 4.35%. The Board said financial conditions have tightened this year, with money market rates and government bond yields up and the exchange rate appreciating. Domestically, inflation picked up materially in the second half of 2025 and has been lifted further by higher fuel prices and pass-through into other goods and services, while short-term inflation expectations have eased but remain above earlier-in-the-year levels; at the same time, consumer spending growth is slowing as expected, housing momentum has shifted with prices falling in some capital cities, unemployment was higher than expected in April, business investment growth is strong and credit remains readily available to households and businesses. The Board said uncertainties remain elevated, with the conflict in the Middle East still at an early stage of resolution, global oil supply problems likely to keep upward pressure on energy prices and inflation, and prolonged uncertainty posing downside risks to growth in Australia’s major trading partners and Australia. It said policy will remain data
Reserve Bank of Australia2026-06-16
Reserve Bank of Australia Holds Cash Rate Target at 4.35%
The Reserve Bank of Australia kept the cash rate target at 4.35% on 16 June 2026, citing still too high headline and underlying inflation and the need to assess the effects of earlier rate increases and the global oil supply disruption on inflation and activity. The Board said financial conditions have tightened, domestic inflation has been lifted by higher fuel prices and broader pass-through, uncertainties remain elevated from Middle East-related oil supply risks, and policy will stay data dependent with further tightening possible if required.