RBA holds the cash rate at 4.35% but says it is prepared to raise again

The Reserve Bank of Australia's Monetary Policy Board kept the cash rate target at 4.35% on 11 August 2026. Reports from the announcement described the decision as unanimous.

What the Board said

The Board noted that headline inflation had cooled somewhat in June and that property prices had fallen by a little more than expected in recent months. But it judged that headline inflation is still too high, and that trimmed mean inflation, its preferred measure of underlying price growth, remains elevated and little changed from the March quarter.

The key message for markets was in the forward guidance: the Board said it remains prepared to raise rates again if the upside risks to inflation materialise.

Why AUD traders care

The Australian dollar is sensitive to the gap between Australian and US interest rates, to demand from China for Australian commodities and to global risk appetite. A central bank that keeps the option of tightening on the table tends to limit downside in the currency when data surprise on the high side, while a run of softer inflation readings would make that option less likely.

For traders of AUD/USD, the next quarterly inflation figures and the RBA's following statements are the points to watch on the economic calendar. China's trade data also matter: exports rose 25% in August.