Central bank leaves rate unchanged for second consecutive meeting as softer inflation data reduces case for further tightening
The Reserve Bank of Australia (RBA) has held the cash rate at 4.35% at its August meeting, pausing for a second consecutive time following three successive increases earlier in 2026 that reversed the full 75 basis points of easing delivered last year.
The decision was widely anticipated. All four major banks — Commonwealth Bank, NAB, ANZ and Westpac — had forecast a hold ahead of the meeting, and a Reuters poll found unanimous agreement among 37 surveyed economists that the Monetary Policy Board would leave the rate unchanged.
At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35 per cent.
— Reserve Bank of Australia (@RBAInfo) August 11, 2026
Read the full statement here: https://t.co/rkuquhzhaA pic.twitter.com/eeAutRHXlx
The case for a pause was reinforced by June quarter inflation data, which came in below forecasts. Headline inflation stood at 3.8% annually, while the trimmed mean — the RBA's preferred measure of underlying price pressures — rose 3.6% over the year, beneath both market expectations and the bank's own May forecast of 3.8%.
However, an MPA LinkedIn poll found a majority of respondents anticipate at least one further RBA rate rise before 2026 is out.
The cash rate has risen by 75 basis points since February, when the board began unwinding the rate cuts made during 2025. For a borrower carrying a $600,000 mortgage with 25 years remaining, each 25-basis-point rise adds approximately $92 per month to minimum repayments.
Mark Haron (pictured right), executive director at Connective, said the hold would provide some relief, though underlying pressures on households remain significant.
"Today's hold decision will be welcomed by borrowers, but many households remain under pressure even with the pause in rates," he stated. "Higher borrowing costs and ongoing cost-of-living challenges mean many Australians will likely still be carefully managing household budgets.
"Across our broker network, we're seeing borrowers come to terms with the reality that interest rates could remain elevated for some time. That uncertainty continues to weigh on confidence, with consumer sentiment remaining among the weakest levels seen in the past 50 years. Many are focused on how they can adapt to a higher-rate environment over the longer term.
"That caution is also flowing through to broader housing market activity. Confidence remains subdued, with many buyers taking more time to make decisions as they weigh up the outlook for interest rates and property values, while some sellers are choosing to hold off listing until conditions improve."
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