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Reserve Bank Raises Cash Rate to 4.85 Per Cent in 6-3 Vote
Reserve Bank raises cash rate to 4.85 per cent in 6-3 vote, its fifth rate rise this year
Key points
- The cash rate rose 25 basis points to 4.85 per cent, an 18-year high.
- The rate was raised on a six-to-three vote, the fifth rate rise this year.
- Third-quarter consumer price index came in higher than expected, and oil remains above $US100 a barrel.
Why it matters. Rates might have to rise further if inflation does not cool as hoped, and the market is pricing about a 50-50 chance of a follow-up move above 5 per cent.
The Reserve Bank of Australia lifted its official cash rate by 25 basis points on Tuesday, taking it to an 18-year high of 4.85 per cent. It was the fifth rate rise this year and the most aggressive tightening cycle since 2022, as the bank fights inflation running well above its 2.5 per cent midpoint target. The market had priced in an 88 per cent chance of a move, in line with most economists, after the third-quarter consumer price index came in higher than expected.
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Reserve Bank Raises Cash Rate to 4.85 Per Cent in 6-3 Vote
The Reserve Bank of Australia raised the cash rate to 4.85 per cent on November 3, 2026, in a 6-3 majority vote. The Bank also downgraded its economic outlook in the same decision. Macquarie and Ubank have passed the increase on to customers, with Macquarie passing it to both borrowers and savers. Markets reacted with the Australian dollar falling and shares retreating from early gains. Ten-year bond yields hit two-month lows, while gold rebounded and oil prices fell below US$105 a barrel on hopes related to Iran.