Rate Announcement and History
Tuesday 16th June 2026
At its meeting today, the Reserve Bank of Australia Board decided to leave the cash rate target unchanged at 4.35 per cent.
Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of the increase reflected greater capacity pressures. The latest data show that headline and underlying inflation are still too high.
There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation. Resolution of the conflict in the Middle East is at an early stage, and there are plausible scenarios where inflation is higher and activity lower than envisaged under the May baseline forecasts. Global oil supply issues will take some time to resolve, maintaining upward pressure on global energy prices and inflation.
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. Monetary policy is well placed to respond to developments and the Board is focused on its mandate to deliver price stability and full employment. It will do what it considers necessary to achieve that outcome, including increasing the cash rate target further if required.
You can read the full statement from Michele Bullock, Governor of the Reserve Bank.
Why RBA 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 superannuation and other accounts.
- Borrowers (again, including individuals and businesses) feel the effects through the interest and principal repayments on variable rate loans. If you have a home loan, speak with our mortgage broking team about whether your current rate remains competitive.
- 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 and 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 or negative environment for growth investments like shares and property, which feature heavily in most investors’ portfolios including super. Our financial planning team can help you assess how the current rate environment affects your investment strategy.
- For those in or approaching retirement planning, the rate environment directly influences income stream returns and the sustainability of pension drawdowns.
If you’d like to discuss how the current rate environment affects your financial position, contact us for a free initial discussion.