Australia hikes rates to 18-year high to fight inflation
The Reserve Bank of Australia raised its cash-rate target by 25 basis points to 4.85%, citing persistent inflation pressure.
TL;DR
- The Reserve Bank of Australia raised its cash-rate target by 25 basis points to 4.85%, according to CNBC and Reuters.
- The move was the fifth rate increase in 2026 and put the rate at its highest level since 2008.
- The RBA said inflation remained a concern; the decision does not establish how future rates or economic activity will evolve.
CNBC reported that the Reserve Bank of Australia raised its benchmark rate by a quarter percentage point to 4.85%. Reuters reported the same decision and said the bank warned that further tightening could be needed if inflation remained persistent. [1] [2]
The RBA's target rate reached its highest level since late 2008, according to both reports. CNBC described the move as the fifth hike this year. [1] [2]
Reuters said the central bank viewed inflation pressures as persistent and expected inflation to remain above 3% in the coming year. The decision records its current assessment, not a guarantee about prices or economic activity. [1] [2]
The decision was not unanimous: Reuters reported that six members voted for the increase and three preferred to hold the rate at 4.60%. Future decisions will depend on incoming data and the bank's assessment of inflation risks. [1] [2]
Why it matters
The RBA's fifth increase this year shows that inflation concerns remain central to policy in Australia. The vote was divided, and the effect on demand and inflation will take time to emerge.
Editor's note
This reports the central bank decision, not household financial advice. The vote split and inflation outlook are attributed to Reuters.