The Reserve Bank of Australia raised its cash rate target by 0.25 percentage points to 4.60% on 29 September 2026, according to the statement from its Monetary Policy Board. The vote was unanimous.
What happened
The board said that some of the upside inflation risks it flagged at its August meeting have materialised. It pointed to further disruption to global oil supply, a Middle East conflict that has widened, and energy prices that are well above what it assumed in August. It also noted that domestic growth and inflation came in higher than expected, that higher fuel costs are partly passing through to other goods and services, and that firms report cost pressures and are raising or planning to raise prices.
The statement described a mixed economy: growth has slowed and consumer spending is easing gradually, housing prices have fallen in most capital cities and new housing lending has declined noticeably, and labour market conditions have eased, while business investment and debt growth remain strong. It said growth in Australia's major trading partners has been stronger than expected.
On guidance, the board said it will do what is necessary to return inflation sustainably to target, including raising the cash rate further if needed, and that future decisions depend on incoming data.
Why it matters for traders
The Australian dollar is sensitive to rate expectations, commodity prices and global risk appetite all at once, so a rate decision is rarely the only driver of moves in AUD pairs. The wording of the statement and the governor's press conference often matter as much as the headline number, and prices can reverse within minutes of each.
Higher domestic rates also change carry costs. Positions held overnight on AUD pairs, and on Australian index CFDs, carry financing charges that reflect the rate environment, so longer holding periods become more expensive or more rewarding depending on direction.
What to watch
- Australian inflation and jobs data, which feed the next board discussion.
- Energy prices, which the board identified as a key source of risk.
- Swap or financing rates in your broker's published schedule.
Sources
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