FX.co ★ Australia Holds Cash Rate as Expected

The Reserve Bank of Australia (RBA) held its cash rate steady at 3.6% during its November 2025 meeting, aligning with market expectations and keeping borrowing costs at their lowest level since April 2023. The central bank observed a significant reduction in inflation from its peak in 2022, despite a temporary increase in September. The board anticipates an additional rate cut in 2026, with underlying inflation projected to exceed 3% shortly before declining to approximately 2.6% by 2027. Policymakers emphasized the ongoing uncertainty in both domestic and global economic scenarios. A stronger-than-anticipated private demand could lead to tighter labor markets and increased inflation, while a slowdown might impede growth. On the global stage, persistent geopolitical and trade tensions continue to pose risks, despite upward adjustments in forecasts for global growth. The RBA acknowledged that financial conditions have become more relaxed, but noted that the full effects of previous rate cuts will take time to manifest. The bank remains cautious, relying on data to guide its decisions, and is closely monitoring trends in inflation, demand, and labor markets.