RBA Hikes Key Rate to 15-Year High

2026-09-29 04:35 By Kyrie Dichosa 1 min. read

The Reserve Bank of Australia raised its cash rate target by 25 bps to 4.60% in a unanimous September 2026 decision, in line with expectations, marking its fourth hike this year and taking borrowing costs to their highest since 2011.

Policymakers noted that higher global energy prices following oil supply disruptions amid the broader Middle East conflict, stronger-than-expected recent inflation and persistent domestic capacity constraints are adding to inflation.

AI-related demand is also driving increases in global technology goods prices, while firms report rising costs and plans to pass costs on.

At the same time, output growth slowed but was slightly stronger than expected in Q2, while consumer spending is easing.

Housing prices fell in most capital cities and new housing loans declined, while labour market conditions have now also eased.

The Board said further tightening may be needed to prevent inflation from becoming embedded and return it sustainably to target.



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RBA Hikes Key Rate to 15-Year High
The Reserve Bank of Australia raised its cash rate target by 25 bps to 4.60% in a unanimous September 2026 decision, in line with expectations, marking its fourth hike this year and taking borrowing costs to their highest since 2011. Policymakers noted that higher global energy prices following oil supply disruptions amid the broader Middle East conflict, stronger-than-expected recent inflation and persistent domestic capacity constraints are adding to inflation. AI-related demand is also driving increases in global technology goods prices, while firms report rising costs and plans to pass costs on. At the same time, output growth slowed but was slightly stronger than expected in Q2, while consumer spending is easing. Housing prices fell in most capital cities and new housing loans declined, while labour market conditions have now also eased. The Board said further tightening may be needed to prevent inflation from becoming embedded and return it sustainably to target.
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