Latest bank decision: At its meeting on 28 January, the Bank of Canada held the target for the overnight rate...
RBA Cash Rate in Australia
The Reserve Bank of Australia (RBA) maintained relatively low policy rates for much of the last decade. Post-financial crisis, rates saw a cycle of lowering to support GDP growth, reaching historic lows during the COVID-19 pandemic. However, monetary policy was then tightened sharply, with the policy rate rising to over 4% through end-2024, as the RBA looked to ward off inflation. In 2025, the Bank has shifted towards normalizing policy amid easing price pressures.
The rba cash rate ended 2024 at 4.35%, compared to the end-2023 value of 4.35% and the figure a decade earlier of 2.50%. It averaged 1.98% over the last decade. For more interest rate information, visit our dedicated page.
Australia Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Australia from 2014 to 2025.
Source: Macrobond.
Australia Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| RBA Cash Rate (%, eop) | 0.10 | 0.10 | 3.10 | 4.35 | 4.35 |
| 90-Day Bank Bill (%, eop) | 0.02 | 0.06 | 3.17 | 4.35 | 4.44 |
| 10-Year Bond Yield (%, eop) | 0.97 | 1.67 | 4.03 | 3.96 | 4.37 |
Central Bank leaves rates unchanged in December
Latest bank decision: At its December meeting, the Central Bank decided to leave the cash rate at 3.60%, following 75 basis points of cuts earlier in the year.
Inflation concerns motivate hold: Inflation has ticked up in recent months to above the Central Bank’s 2.0–3.0% target, and has been higher than the Bank expected. This, coupled with recovering domestic economic activity and the Bank’s desire to assess the impact of past rate cuts, likely motivated the hold.
Zero-to-mild monetary easing expected in 2026: The Bank’s forward guidance was open-ended. Our panelists are broadly split on the outlook for 2026: Some anticipate further monetary easing as inflation pulls back, while others see rates on hold. Our Consensus is for a terminal cash rate of just above 3% in the longer term.
Panelist insight: On the outlook, Goldman Sachs analysts said: “Looking ahead, we continue to expect the RBA to keep the policy rate at 3.60% for the foreseeable future, on the assumption the 4Q2025 CPI (29 Jan) report confirms that the historically large upside surprise in 3Q2025 was partly just volatility. However, we caution that the balance of risk continues to skew towards the next move in rates being higher.” In contrast, United Overseas Bank’s Lee Sue Ann said: “Although inflation remains the central focus now, we anticipate that restoring consumer demand will become the dominant issue ahead, likely requiring a more accommodative policy stance and additional rate cuts. For now, we are penciling two more 25-bps rate cuts by the RBA by 1H26.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Australian interest rate projections for the next ten years from a panel of 22 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Australian interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Australian interest rate projections.
Want to get access to the full dataset of Australian interest rate forecasts? Send an email to info@focus-economics.com.
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