The RBA held the cash rate at 3.60% as inflation hit 3%, signalling a wait-and-see approach to balance growth, stability, and economic volatility.
👉 Background: The Reserve Bank of Australia (RBA) meets eight times a year to review the cash rate, with the aim of keeping inflation and unemployment in check. This year, we've already seen three rate cuts, totalling 0.75% cut.
👉 What happened: In September, it was revealed that the Consumer Price Index (ie inflation) rose from 2.8% to 3% for the 12 months to August 2025. This is the top of the RBA's target inflation range, so it was no surprise that the RBA ultimately chose to hold the cash rate steady at 3.60%.
👉 What else: By pausing the cash rate, the RBA has signalled a cautious approach so that they can allow more time to observe changes in the broader economy and ride out any short-term volatility.
What's the key learning?
💡You don’t need a mortgage to care about cash rate changes. If you’ve got savings, the cash rate likely impacts your interest... and could be affecting you in other subtle ways too.
💡For example, when the interest rate is lower, it typically becomes cheaper for businesses to borrow money. And that means businesses could to spend more on growth activities like hiring new staff or investing in new opportunities.
💡The cash rate even has a domino effect on your investment and super portfolios becausde there’s a positive link between cash rate cuts and the share market. Get this: the ASX 200 typically gains 6-7% in the year after the first cut. So it’s not just about mortgages…the cash rate impacts the whole economy.
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