Latest RBA Interest Rate Announcement and History
Tuesday 3rd February 2026
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.85 per cent.
While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.
The Board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures.
Various indicators suggest that labour market conditions remain a little tight and that they have stabilised in recent months, in line with the pick-up in momentum in economic activity.
The Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. In doing so, it will pay close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market. The Board is focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome.
To view the full statement of Michele Bullock, Governor of the Reserve Bank, please click here.
Why do RBA interest rate decisions matter?
RBA interest rate decisions are the key tool for the RBA to influence the Australian economy. They matter for a number of reasons, and affect people of all ages and circumstances:
Deposit holders (including individuals and businesses) will experience this directly through the interest rates offered by banks. To some extent, this also applies to the cash and defensive assets within super and other accounts.
Borrowers (again, including individuals and businesses) feel the effects through the interest and principal repayments on variable rate loans (and indeed on new fixed rate loans).
Lower interest rates tend to stimulate the economy, by improving cashflow for individuals and businesses with debt, as well as encouraging investment spending and employment. Conversely, higher rates restrict household & corporate budgets and spending, putting the brakes on the economy.
Expectations of economic performance, along with other mechanisms for pricing financial markets, tend to provide a positive environment for growth investments like shares and property, which feature heavily in more investors portfolios including super.