Once again the Monetary Policy Board of the Reserve Bank of Australia (RBA) has announced that it will hold the official cash rate steady at its current level of 4.35 per cent.
The decision, announced on Tuesday afternoon (11 August), was broadly forecast by major economists and financial markets, and continues the holding pattern for the second rate decision in a row.
The central bank’s decision to keep the cash rate at its current setting suggests it is prioritising a wait-and-see approach to ensure that the lower-than-expected June inflation print is sustained and to assess the economic impacts of the three consecutive cash rate hikes between February and May.
The policy decision was unanimous.
In its post-meeting statement, the board said that it remained focused on “ensuring that high inflation does not become embedded”.
“To achieve this, growth in aggregate demand needs to remain subdued to reduce capacity pressures and bring inflation back to target,” it said.
While the RBA acknowledged that the three rate increases delivered since the start of 2026 had tightened financial conditions, it said the economy was slowing broadly in line with expectations.
“Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected,” the board said.
However, the board also warned that inflation remained above target and was unlikely to return to the midpoint of the band until late 2027.
“But inflation is still too high. It is not expected to return to around the midpoint of the target range until late 2027 and there are upside risks to this projection,” it said.
“With monetary policy judged to be somewhat restrictive, the Board decided to leave the cash rate target unchanged while it assesses how the economy is evolving.”
The board retained its warning that it was prepared to raise the cash rate again should inflation risks intensify.
“The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise,” the statement said.
Refinancing and buyer opportunities
The latest inflation data released by the ABS last month does likely justify the decision to hold the cash rate, and there is still a risk that the RBA may need to lift the cash rate again.
For borrowers, we recommend that this hold shouldn’t mean standing still, especially when it comes to their home loan. It’s a good opportunity for borrowers to reassess their home loan.
Current data shows that borrowers are already using this time to make sure their loan is the best for their current circumstances. For large lender groups like LJ Hooker Home Loans, in July refinance loan submissions accounted for approximately one in three loan submissions.
Potential buyers should use the lead-up to the spring selling season to clarify their borrowing capacity and consider the impact further rate rises could have on future repayments.
Speaking to an LJ Hooker Home Loans lending specialist can help you understand what your borrowing power is and how future rate rises could impact your repayments.
A free phone or web-based review of your home loan can take 5 minutes. With a fast application process like the LJ Hooker Home Loans Express REFI product you can potentially refinance within 7 days.
If you’re keen to switch and save, or just have a free home loan review, get in touch with one of our local specialists today. We can also offer free property market info to help with your equity assessment.
We know loans like we know homes.
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This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.