Reserve Bank of Australia Holds Cash Rate at 4.35% as Inflation Remains Elevated

The Reserve Bank of Australia (RBA) kept its official cash rate unchanged at 4.35% in its June 2026 monetary policy meeting, marking the first hold this year after three consecutive 25‑basis‑point hikes. Governor Michele Bullock said the decision reflects slowing growth, higher unemployment and still‑high headline and underlying inflation, which remains above the 2‑3% target range. The board highlighted that elevated oil and fuel prices stemming from the Middle‑East conflict continue to feed price pressures, though recent easing in global energy markets is easing some concerns. Treasury Minister Jim Chalmers welcomed the pause but noted it offers no immediate relief for borrowers, while opposition figures warned that households still face the highest mortgage rates in years. Market analysts expect the RBA may keep rates steady for the rest of 2026 but keep the option to tighten further if inflation does not moderate. The hold is expected to sustain higher mortgage repayments and limit borrowing capacity for home‑buyers, with the property market already showing slower price growth and reduced buyer activity.

The decision follows similar policy stances by other major central banks, which are also largely on hold, and comes as the United States and Iran work toward a peace agreement that could impact future oil prices.