Reserve Bank of Australia leaves the cash rate at 4.35%

• The Reserve Bank of Australia left the cash rate target unchanged at 4.35% at its meeting on June 16.
• Financial conditions tightened earlier this year following three consecutive interest rate increases, which has slowed consumer spending and lowered housing prices in several capital cities.
• The board stated that it maintained the current rate to assess the economic response to previous interest rate rises and the ongoing impact of global oil supply disruptions.

The Reserve Bank of Australia kept the official cash rate target unchanged at 4.35% to assess the impact of previous interest rate rises and global oil supply disruptions on the domestic economy.

The steady decision follows a material pickup in headline and underlying inflation during the second half of 2025 and early 2026, which exceeded initial market expectations due to persistent domestic capacity pressures.

The central bank noted that higher fuel prices have added directly to inflation, and there are indications that these cost pressures are now passing through to the prices of other goods and services.

The board stated that monetary policy is well placed to respond to developments, and it will do what it considers necessary to deliver price stability, including increasing the cash rate target further if required.

The decision comes after the RBA implemented three interest rate increases earlier this year, which successfully slowed growth in consumer spending and shifted momentum in the housing market.

The board stated that heightened uncertainties remain regarding the domestic outlook, noting that a period of prolonged global uncertainty could cause economic growth to be lower in Australia and its major trading partners.