The Reserve Bank of Australia (RBA) has held the cash rate today.
This keeps the cash rate at 4.35%, with the average rate for a new owner occupier home loan likely to remain around 6.25% p.a. while the average bonus savings account rate will hold around 4.75% p.a.
That's a wrap
Published 3:45pm, Tuesday
Here ends our live coverage of the August RBA decision to hold the cash rate at 4.35%.
Check Savings.com.au later today for an end-of day wrap-up of today's verdict and media conference.
See you again for the next cash rate decision on 29 September.
Expectations for further cash rate increases 'have receded'
Published 3:40pm, Tuesday
The Statement of Monetary Policy notes a decline in global oil prices since its May statement and some weaker-than-expected domestic data have "contributed to a shift lower in the market path for the cash rate".
The RBA notes markets are pricing in about "half a chance of a cash rate increase" by the end of the year.
Many of the big bank economists believe the current upcycle has peaked although there are still some commentators who believe there may be a case for another cash rate increase by the end of the year.
The Statement of Monetary Policy is perhaps more dovish in tone than the markets might have expected.
However, the RBA board did not resist injecting its key message of recent times: "inflation is still too high".
Still risk factors afoot
Published 3:20pm, Tuesday
The Statement of Monetary Policy notes several domestic and global factors posing upside risks to the inflation outlook.
Chief among these is an escalation in the Middle East conflict increasing oil and related prices further.
Stronger-than-expected growth in AI and related technology prices may also flow through to consumer prices, the Statement notes.
As well, higher growth in demand for the building of new data centres has the capacity to push construction costs higher.
However, capacity pressures in the domestic economy and labour market could also ease sooner than forecast, depending on negative effects of the Middle East conflict or greater-than-expected deterioration in the housing market.
While the board maintains its view that monetary policy is "somewhat restrictive", the cash rate will remain on hold while it assesses how the economy evolves.
RBA sees economy faring better than previous expectations
Published 3:10pm, Tuesday
That Statement on Monetary Policy adopts a more optimistic outlook than the one last published in May.
It sees the RBA lower its expectations of peak inflation, with both headline and underlying inflation forecast to come back to the midpoint of the 2-3% target range by early 2028.
However, before anyone gets too optimistic, the RBA notes that risks to its inflation forecasts are skewed heavily to the upside.
This essentially means if its forecasts are not accurate, inflation will be higher than what is expected.
Fresh forecasts
Published 3:02pm, Tuesday
The new Statement on Monetary Policy outlines the Reserve Bank's updated economic forecasts and was released alongside today's decision.
The RBA's forecast for economic growth is now 1.4% by December 2026 (revised from its previous forecast of 1.3%).
Its forecast for trimmed mean inflation has dropped to 3.3% from its previous forecast of 3.5%.
The longer-term forecasts for trimmed mean inflation have also shifted, with the rate expected to fall to 2.4% by June 2028.
Meanwhile, the unemployment rate by December 2026 is expected to rise to 4.5% (revised up from 4.3%) and is expected to hit 4.8% in June 2028.
Rationale behind today's decision
Published 2:45pm, Tuesday
The Statement by the Monetary Policy Board reiterates the RBA's position that inflation is still too high and not expected to return to mid-point of the 2-3% target range until late 2027.
It said while the impact of the Middle East conflict has been less than expected so far, headline inflation remains too high.
It notes there are signs that consumer spending growth is slowing gradually as expected while momentum in the housing market has shifted.
At the same time, the statement notes labour market leading indicators point to only limited easing in the near term.
There remains uncertainties surrounding the outlook for the economy and inflation, including the Middle East conflict and recovery in global oil supplies.
This may impact growth both in Australia and among major global trading partners, which have seen stronger growth attributed to AI-related investment outweighing effects of the Middle East conflict.
The monetary policy board notes Australia's historically weak productivity continues to constrain potential growth.
Here's an extract from the Statement about today's decision:
"With monetary policy judged to be somewhat restrictive, the Board decided to leave the cash rate target unchanged while it assesses how the economy is evolving. 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."
Unanimous decision to hold cash rate at 4.35%
Published 2:32pm, Tuesday
The RBA reports the decision to hold the cash rate in August was unanimous.
RBA holds cash rate at 4.35%
Published 2:30pm, Tuesday
The RBA monetary policy board has decided to hold the cash rate at 4.35% at its August meeting.
RBA August cash rate decision imminent
Published 2:20pm, Tuesday
The Reserve Bank of Australia monetary policy board will publish its decision and post-meeting statement in around five minutes.
Its quarterly Statement on Monetary Policy will contain updated economic forecasts, including outlooks for inflation, economic growth, and employment.
Once the outcome is announced at 2:30 pm (AEST), markets will have an hour to digest the news before RBA governor Michele Bullock fronts a media conference at 3:30 pm (AEST).
What will an RBA rate hold mean to savers?
Published 2:15pm, Tuesday
People sitting on cash reserves haven't done too badly in 2026 after three consecutive interest rate increases.
Many savings accounts and term deposits are paying interest over the 5% benchmark.
One new savings product from ING is even offering an introductory rate of 6% for new customers, an interest rate briefly offered by one small bank in 2024 on high savings balances.
Prior to that, the last time the Australian market saw a deposit product with a '6' in front was 2013.
In recent months, term deposit rates have been generally decreasing, particularly for medium-to-longer terms, a signal rate setters are not expecting the cash rate to increase in that time period.
The RBA's own data shows average one- and three-year term deposit rates of Australia's largest five banks have decreased for the first time in 12 months.
What will an RBA rate hold mean to mortgage holders?
Published 2:00pm, Tuesday
After three consecutive cash rate increases to kick off 2026, those paying off home loans were no doubt pleased with some respite in June.
Cash rate increases see banks and lenders raise variable interest rates, effectively increasing home loan repayments and soaking up some extra cash in the economy.
That is essentially how the Reserve Bank tries to bring down inflation, although many argue its only tool is a blunt weapon that burdens mortgage holders while other demographics are less affected.
Such is the nature of monetary policy.
The data being considered in today's cash rate call
Published 1:55pm, Tuesday
The RBA’s monetary policy board will, as usual, consider a comprehensive suite of data in making its decision.
Arguably, the key data for any cash rate call is CPI inflation.
The annualised headline figure eased to 3.8% in June, down from 4.0% in May, while underlying inflation, measured by trimmed mean inflation, remained unchanged at 3.6%.
The trimmed mean came in lower than the RBA's forecast of 3.8%, leading many commentators to believe the RBA was unlikely to adjust the cash rate in August.
The lower inflation figure doused speculation of a cash rate increase on the back of earlier employment data showing a resilient jobs market in June.
While Australia's unemployment rate remained steady at 4.4% in June, employment surged thanks to 76,000 new jobs which overshot market expectations.
The Reserve Bank of Australia needs to take both data sets into account given its 'dual mandate' to achieve price stability and full employment simultaneously.
What are experts predicting for today's RBA cash rate decision?
Published 1:50pm, Tuesday
Economists and markets are virtually unanimous there will be no change to the 4.35% cash rate after the two-day meeting of the RBA's Monetary Policy Board.
This would follow a hold at the June meeting after three consecutive 25-basis point cash rate hikes in 2026 - in February, March, and May.
As of yesterday, financial markets were pricing in a 3% chance of another hike in August although the odds have been as low as 0% since late last month.
The chances of a cash rate increase took a rapid dive after the release of key June quarter inflation data which showed headline inflation had eased while underlying inflation remained steady.
This was enough for even the most ardent of forecasters tipping an August cash rate increase to change their calls.
When will the RBA announce its interest rate decision?
Published 1:40pm, Tuesday
The RBA monetary policy board will deliver its verdict on the cash rate at 2:30pm AEST.
Those under Australian Central Standard Time (ACST) will receive the news at 2pm while in Western Australia, the decision will be announced at 11:30am AWST.
Welcome: LIVE coverage of the RBA's August cash rate decision
Published 1:30pm, Tuesday
Hello and welcome to Savings.com.au's live RBA cash rate coverage. I'm Denise, Savings.com.au's senior finance journalist, and I'll be with you today giving you the latest on the RBA's August decision, expert and industry commentary, and any responses from major banks and lenders.
PLEASE refresh this page periodically for the latest updates and if you have any questions, hit me up at denise.raward@savings.com.au.