RBA Minutes Show 5-4 Vote for 25bp Rate Hike to 4.1%

The Reserve Bank of Australia disclosed on Tuesday that its March board meeting featured a closely divided 5-4 vote to raise interest rates by 25 basis points to 4.1 percent, highlighting internal debates over balancing inflation risks from the Middle East conflict against potential economic slowdowns.

The decision marked the central bank's second consecutive rate increase this year, following a unanimous hike in February that reversed two of three cuts implemented in 2025. Board members unanimously agreed that monetary policy remained insufficiently restrictive and that further tightening would likely be necessary in the near term. However, they diverged on the timing, with the majority favoring immediate action to address heightened inflation pressures.

According to the minutes, the ongoing conflict in the Middle East, particularly involving Iran, introduced significant uncertainty about its duration and economic fallout. Policymakers noted that prolonged hostilities could materially affect both inflation and economic activity. If oil prices stabilized around 100 U.S. dollars per barrel, the bank estimated, headline consumer price inflation could climb to about 5 percent in...