A unanimous hold call from economists leaves little room for surprise around Tuesday’s decision, meaning the statement’s language on the inflation and hiking bias is likely to matter more for the Australian dollar than the rate itself. Any softening in the RBA’s tone would weigh on the currency given how fully a hold is already priced, while a reiterated willingness to hike further if required could offer the Australian dollar some support into Governor Bullock’s press conference. Oil prices, still elevated on Middle East supply risk, remain a wildcard for the RBA’s inflation outlook given Australia’s exposure to imported fuel costs. With three-quarters of economists now expecting no change through December, the market’s focus shifts toward the quarterly Statement on Monetary Policy accompanying the decision for clues on the timing of any eventual move.
Earlier:
Economists are unanimous that the RBA will hold on Tuesday, but they remain split on whether that pause lasts through December or gives way to one more hike later in the year.
Summary:
- All 37 economists polled by Reuters expect the RBA to hold its cash rate at 4.35% at Tuesday’s meeting
- 27 of 36 economists expect the rate to remain at 4.35% through end-December, up from 64% expecting that last month
- The RBA has raised the cash rate by 75 basis points since February to 4.35%, fully reversing last year’s easing
- Annual inflation was 4.0% last quarter, still above the RBA’s 2%-3% target, though the core measure at 3.6% came in below expectations
- Major banks including ANZ, CBA, NAB and Westpac expect the cash rate has already peaked, though some economists still see a possible hike in the third or fourth quarter
- The decision is due Tuesday, 11 August 2026 at 2:30pm Sydney time (04:30 GMT, 12:30am US Eastern), with Governor Michele Bullock’s press conference following an hour later at 3:30pm Sydney time (05:30 GMT, 1:30am US Eastern)
The Reserve Bank of Australia is set to hold its cash rate at 4.35% on Tuesday and keep it there for the rest of 2026, according to a Reuters poll in which all 37 economists surveyed expected no change at the August meeting. Since February, the RBA has raised the cash rate by 75 basis points to 4.35%, fully reversing last year’s easing as it worked to contain price pressures that were building even before the US-Israeli war with Iran pushed oil prices sharply higher.
The case for a pause has firmed as inflation data has softened. Annual inflation ran at 4.0% last quarter, still well above the RBA’s 2%-3% target range, but the core trimmed mean measure rose to 3.6%, coming in below both the central bank’s and economists’ expectations. Many economists say underlying price momentum is easing, giving the board room to stay in wait and see mode after three consecutive hikes earlier this year.
The poll also pointed to growing confidence that August will not be followed by further tightening this year. Three quarters of economists, 27 of 36, now forecast no change from 4.35% before end December, up from 64% expecting that outcome just a month ago, and well above the 45% who were anticipating at least one more hike ahead of June’s meeting. Australia’s major banks, including ANZ, CBA, NAB and Westpac, believe the cash rate has already peaked. Not all economists are convinced the tightening cycle is fully over, however. AMP (Australia’s largest fund manager) said commodity prices remain elevated and, with no fuel excise cut this time around, businesses are expected to pass costs on to consumers who are otherwise faring well, leaving what she called a very high chance of another hike in the third or fourth quarter.
The decision will be announced Tuesday, 11 August 2026 at 2:30pm Sydney time, equivalent to 04:30 GMT and 12:30am US Eastern time. Governor Michele Bullock will hold her press conference an hour later, at 3:30pm Sydney time, 05:30 GMT and 1:30am US Eastern time, where she is expected to face questions on both the inflation outlook and the board’s continued hiking bias.
Reserve Bank of Australia Governor Bullock
This article was written by Eamonn Sheridan at investinglive.com.
