RBA holds cash rate at 4.35% amid inflation concerns

The Reserve Bank of Australia held its official cash rate steady at 4.35 per cent on Tuesday, August 11, 2026, in a widely anticipated decision, but warned it remains prepared to raise rates again if necessary to bring inflation back to its target. The unanimous decision by the nine-member board marked the second consecutive meeting without a change, following three rate hikes earlier in the year.

In its post-meeting statement, the board said the economy is slowing as expected but emphasized that inflation remains too high. Headline inflation stood at 3.8 per cent in the year to June, and the board noted it is not expected to return towards the 2.5 per cent target until late 2027. "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.

The decision comes amid a significant cooling in the housing market. Property values have declined sharply in Sydney and Melbourne, with the downturn now spreading to other major cities. ANZ economists forecast capital city home prices will fall at least 5 per cent from their peaks, with Sydney...