RBA Holds Cash Rate Steady at 3.85%

The Reserve Bank of Australia (RBA) has decided to hold the official cash rate at 3.85%, continuing its cautious approach as it monitors inflation and economic conditions both at home and abroad.

Inflation Eases, But Not Enough for a Cut

While inflation has been trending downward and is now close to the RBA’s target range of 2–3%, recent data showed a slight uptick. This has led the central bank to pause any rate cuts for now, waiting for clearer signs that inflation is sustainably under control.

“We are encouraged by the progress on inflation, but we remain vigilant,” the RBA noted in its statement.

Global Uncertainty Adds to the Caution

Geopolitical tensions and shifting trade policies continue to create uncertainty in the global economy. These factors are influencing the RBA’s decision to maintain stability and avoid any premature moves that could disrupt recovery.

Domestic Economy: Mixed Signals

On the home front, household incomes and spending are showing signs of recovery. However, some sectors are still grappling with weak demand and high labour costs. The labour market remains tight, but productivity growth has yet to pick up meaningfully.

What’s Next?

By keeping the cash rate steady, the RBA is preserving flexibility for future decisions while offering a stable environment for households and businesses. This move signals a “wait and see” approach as the central bank continues to assess incoming data.

How This Affects You:

• Homeowners: Mortgage repayments remain unchanged for now.

• Savers: Deposit rates are likely to stay steady.

• Investors: Markets may respond positively to the stability, but remain sensitive to future rate signals.