Australia Raises Cash Rate to 4.6%, Highest Since 2011
Australia's central bank raised its cash rate to 4.6% on 29 September 2026. The Guardian
The rate, which helps set borrowing costs across the economy, rose from 4.35% to 4.6%. The vote was unanimous. It was the fourth increase this year, after three earlier rises in 2026. At 4.6%, the 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. Its 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 decision. The press conference gives her scope to explain the Board's assessment and its forward guidance, while the written statement stays 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 raised the target by 25 basis points (0.25 percentage 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 left the 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 keeping options open while staying united. A unanimous fourth hike in nine months shows Board agreement on direction, even after June and August pauses. Keeping the line about further hikes if needed preserves a tightening bias without promising each meeting's outcome. That keeps funding and mortgage pricing tied to data, not a calendar.
Looking at what this means for the months ahead, forecasts, market bets and Board messages will be central. With most major banks expecting another hike and markets having shifted on inflation data, September's decision confirms that repricing. Small currency and share moves suggest investors had adjusted. The question now is whether unanimity holds if data forces a choice between a long hold at 4.6% and more tightening to hold inflation within 2% to 3%.
