RBA Lifts Cash Rate to 4.6% in Unanimous September Decision

The Reserve Bank of Australia lifted its cash rate to 4.6% on 29 September 2026. The Guardian

The increase took the cash rate target from 4.35% to 4.6%. The vote was unanimous. It was the fourth cash rate increase this year, after three increases earlier in 2026. At 4.6%, the cash rate stands at its highest level since 2011.

The Bank published the outcome on 29 September 2026 as Media Release 2026-27. It titled the release 'Statement by the Monetary Policy Board: Monetary Policy Decision'. RBA

The Board tied the decision to its inflation mandate. The RBA's inflation target range is 2% to 3%. The Board said it would "continue to do what is necessary to bring inflation sustainably back to target, including raising the cash rate further if needed."

RBA governor Michele Bullock was scheduled to speak at 3.30pm AEST to explain the rate decision. The press conference format gives the governor scope to elaborate on the Board's assessment and its forward guidance, while leaving the written statement as the formal record.

Market reaction was immediate but contained. After the decision, the Australian dollar rose from 70.11 US cents to 70.17 US cents. The S&P/ASX200 slipped from 8,697 to 8,671 points.

The September move extends a tightening sequence that has defined 2026. The Board had increased the cash rate target by 25 basis points to 4.10 per cent in March. Cumulatively, it raised the cash rate by 75 basis points since February 2026 to reach 4.35%, a tightening that fully reversed the prior year's easing. Reuters

That path included pauses for assessment. On 11 August 2026, the Board decided to leave the cash rate target unchanged at 4.35 per cent. An earlier decision to leave the target unchanged at 4.35 per cent, in June, was also unanimous. The Bank subsequently listed its cash rate target as 4.35% with an effective date of 12 August 2026.

Expectations had been moving toward further tightening before the September meeting. As of 27 August 2026, three of Australia's four major banks forecast another RBA rate hike in 2026. Markets saw a 50% chance the RBA would hike to 4.6% in September, up from 17% before inflation data. Reuters

The broader context here is a central bank managing optionality while maintaining unanimity. A unanimous vote for a fourth hike in nine months signals cohesion on the Monetary Policy Board about the direction of policy, even after intervening pauses in June and August. The explicit reference to raising the cash rate further if needed preserves tightening bias without pre-committing to a meeting-by-meeting path. For practitioners, the distinction matters. It keeps term funding and mortgage pricing anchored to data dependence rather than to a calendar.

Looking at what this means for the months ahead, the interaction between bank forecasts, market pricing and Board communication will be central. With a majority of the major banks already positioned for another hike and market pricing having shifted sharply on inflation data, the September decision validates that repricing rather than disrupts it. The limited foreign exchange and equity moves suggest positioning had adjusted in advance. The question now is whether unanimity holds if incoming data requires the Board to choose between an extended hold at 4.6% and additional tightening to secure inflation sustainably within 2% to 3%.