The RBA holds the cash rate at 4.35% — here’s what it means for you

The Reserve Bank of Australia met today and decided to hold the cash rate at 4.35% — the first pause of 2026 after three consecutive hikes earlier this year.

Here’s a plain-English rundown of what happened, what the banks are forecasting next, and what it all means for you.

Cash Rate

4.35%

HELD

2026 Hikes

3

before today’s pause

Next Meeting

10–11 Aug

RBA Board 2026

Why Did the RBA Hold?

Inflation is still too high. Annual CPI came in at 4.2% (April 2026), down from 4.6% — but trimmed mean inflation ticked up to 3.4%, above the RBA’s 2–3% target band.

The economy is beginning to slow. Financial conditions have become more restrictive — which is exactly the RBA’s intent, but the board wants to see how far the slowdown goes before doing more.

Global uncertainty. Ongoing conflict in the Middle East is pushing up fuel prices, which are filtering through to other goods and services.

A pause, not a pivot. The board stressed it will act further if inflation doesn’t continue to moderate. This is breathing space, not an all-clear.

“The board remains focused on ensuring that inflation does not become embedded once the impulse from higher oil prices has passed through. To achieve this, growth in demand needs to slow to reduce capacity pressures and help bring inflation back to target.”

— RBA Monetary Policy Board Statement, 16 June 2026

What Are the Major Banks Forecasting?

What Does This Mean for You?

  You’re on a variable rate

No change to your repayments today. But with Westpac still forecasting further hikes, now is a good time to check whether your current rate is still competitive. After three rises, there can be meaningful differences between lenders — a review costs nothing.

  Your fixed rate is expiring soon

With the banks split on August — three forecasting a hold, one forecasting a hike — the fix vs. variable decision isn’t clear-cut. If you’re rolling off in the next 6–12 months, let’s map out the scenarios for your specific loan so you’re not caught off guard.

  You’re looking to buy or invest

Cautious borrowers are sitting on the sidelines — which creates opportunity for those who are prepared and pre-approved. Knowing exactly what you can borrow right now, at current rates, puts you in a far stronger negotiating position than waiting to see what August brings.