RBA lifts cash rate to 4.60%, highest in 15 years, signals possible further hikes

SentiSense · Published Sep 29, 2026, 12:30 AM ET · Updated Sep 29, 2026, 8:03 AM ET

The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.60%, the highest level since 2011 and its fourth increase this year. Policymakers cited rising inflation pressures and said additional hikes are not off the table. Analysts caution that the move could deepen the slowdown in the Australian economy.

The Reserve Bank of Australia (RBA) announced a 25‑basis‑point increase to a cash rate of 4.60%, marking the highest benchmark since 2011 and the fourth tightening action in 2026 . The decision was driven by persistent inflation pressures, and the board signalled that further tightening may be required if price growth remains elevated .

In addition to the rate hike, the RBA indicated that more increases are not ruled out, suggesting a willingness to continue tightening policy to anchor inflation expectations. The board said it would do what is necessary to return inflation sustainably to target, "including increasing the cash rate target further if needed." The pressure is visible in the data: annual inflation was 3.5% in July and underlying inflation held at 3.6%, both above the RBA's 2-3% target range. This year's four increases total 100 basis points.

Economic commentators have warned that the aggressive policy shift could accelerate a slowdown in the Australian economy, raising concerns about weaker growth and higher borrowing costs for households and businesses. The interplay between curbing inflation and preserving growth will be a key focus for market participants in the coming months.

Stakeholders should monitor upcoming RBA communications for signals on the timing and magnitude of any further rate adjustments, as well as data releases on inflation trends and GDP growth that could influence the central bank's next moves.