The Reserve Financial institution of Australia (RBA) stored the money charge unchanged at 3.60% in September, in a broadly anticipated choice that mirrored the central financial institution’s cautious strategy amid combined financial indicators.
The unanimous vote to carry got here as latest information prompt inflation could be proving stickier than anticipated.
The RBA struck a cautious tone, noting that “latest information, whereas partial and risky, counsel that inflation within the September quarter could also be larger than anticipated.”
The board emphasised it will stay data-dependent, stating it was “acceptable to stay cautious, updating its view of the outlook as the information evolve.”
Key Takeaways:
- RBA held at 3.60% following three cuts in 2025 (February, Might, August)
- The choice was unanimous amongst board members
- August month-to-month CPI jumped to three.0% y/y from 2.8%, the best since July 2024
- Q3 inflation “could also be larger than anticipated”
- Personal consumption choosing up as actual incomes rise
- Housing market strengthening from the speed lower results
- Credit score progress accelerating to 7.2% yearly
- Unemployment regular at 4.2% in August
Hyperlink to the official RBA Financial Coverage Assertion for September 2025
The central financial institution warned that “indications that inflation could also be persistent in some areas” justified holding regular. Governor Bullock emphasised the necessity to see the complete results of this 12 months’s 75 foundation factors of easing earlier than shifting once more.
In her press convention, Bullock careworn that “we’re in a really tough place with the property market” however emphasised the RBA should deal with its inflation mandate. She warned that larger costs “have an effect on everybody” and reiterated that decreasing inflation doesn’t imply deflation – “we’re decreasing the speed at which costs are rising.”
Bullock refused to offer ahead steering, stating, “I’m not going to foretell what the rate of interest goes to be within the subsequent three to 6 months.”
Markets had broadly anticipated the maintain. NAB now sees no lower till Might 2026, whereas Westpac maintains its November forecast.
Hyperlink to RBA Press Convention for September 2025
Market Response:
Australian Greenback vs. Main Currencies: 5-min
Overlay of AUD vs. Main Currencies Chart by TradingView
The Australian greenback, which had been leaning bullish for the reason that Hong Kong and China market open, jumped broadly and sharply on the RBA’s maintain choice as merchants scaled again easing expectations.
The fast good points possible mirrored diminished odds of a near-term charge lower after the RBA highlighted upside inflation dangers and enhancing home demand. With the central financial institution signaling it needs to see the complete Q3 CPI report earlier than shifting once more, markets pushed again expectations for the subsequent lower from September to November or later.
The foreign money then pulled again throughout Bullock’s press convention, because the RBA chief reiterated the financial institution’s “cautious, gradual” strategy.
AUD’s dip after Bullock’s presser possible mirrored disappointment that she downplayed inflation dangers, saying “inflation will not be operating away” and calling the outlook “fairly constructive” somewhat than pushing again towards charge lower expectations.
Her refusal to offer ahead steering, whereas pointing to international uncertainties and the necessity for extra information, was taken as leaving the door open for additional easing if situations soften, which dented the foreign money’s yield enchantment.
Finish-of-quarter flows could have additionally performed an element, particularly after the Aussie’s broad good points late final week.
The foreign money stays within the inexperienced, with the most important good points towards USD, CAD, and CHF.
