Australia Interest Rate

The Reserve Bank of Australia unanimously kept the cash rate unchanged at 3.6% for a third straight meeting in its final policy decision of 2025, in line with market estimates, maintaining borrowing costs at their lowest since April 2023. The central bank noted inflation has eased markedly from its 2022 peak but has shown a pickup recently. While some of the rise appears temporary, early signals point to broader and persistent price pressures, warranting close monitoring. The labour market was described as “a little tight,” with unemployment edging higher and job growth slowing, yet underutilization remains low, and firms continue to face hiring difficulties. The board warned of uncertainty over domestic and global outlooks, including how restrictive current settings remain. Stronger-than-expected private-sector momentum could intensify capacity strains if sustained. Against this backdrop, policymakers judged it prudent to remain cautious and reassess policy as new data emerge.