What the cash rate target is
The cash rate is the interest rate on unsecured overnight loans between banks. The Reserve Bank of Australia (RBA) describes it as the near risk-free benchmark rate for the Australian dollar. It is also known as AONIA in financial markets.
Monetary policy decisions involve setting a target for the cash rate. The Monetary Policy Board makes the decision.
The RBA issues a media release at 2.30 pm after each Monetary Policy Board meeting. Any change in the cash rate target takes effect the following day. The announcement and effective dates are therefore distinct.
The RBA’s cash rate table records the effective date, the change in percentage points and the resulting cash rate target. The RBA also identifies Statistical Table F1 as its complete historical series.
Why the target moves
The RBA’s monetary policy framework includes a target for consumer price inflation. Since the early 1990s, that framework has expressed the RBA’s objectives through an inflation target of 2–3 per cent per annum.
The target also sits alongside the RBA’s employment objective. If the Monetary Policy Board judges that its objectives cannot be met simultaneously, it must determine how best to balance each objective.
The framework allows the Board to look through short-term deviations of inflation from the target range. The RBA says this flexibility avoids fine-tuning monetary policy that would be unhelpful.
Interest rate changes affect economic activity and inflation with much longer lags. Individuals and businesses need time to adjust their behaviour. This economic lag is distinct from any repricing period specified for an individual lending product.
Official decision sequence
The RBA decision table is presented newest first. Each date below is the effective date shown in that table.
The latest listed target is 4.60 per cent, effective 30 September 2026. The entry records a 0.25 percentage-point increase.
The 12 August 2026 entry recorded no change. Its change was 0.00 percentage points and its target was 4.35 per cent. The 17 June 2026 entry also recorded 0.00 percentage points and a 4.35 per cent target.
The 6 May 2026 entry raised the target by 0.25 percentage points to 4.35 per cent. The 18 March 2026 entry raised it by 0.25 percentage points to 4.10 per cent. The 4 February 2026 entry raised it by 0.25 percentage points to 3.85 per cent.
The 19 February 2025 entry reduced the target by 0.25 percentage points to 4.10 per cent. The 2 April 2025 entry recorded 0.00 percentage points and retained a 4.10 per cent target.
The 21 May 2025 entry reduced the target by 0.25 percentage points to 3.85 per cent. The 9 July entry recorded 0.00 percentage points and retained 3.85 per cent.
The 13 August 2025 entry reduced the target by 0.25 percentage points to 3.60 per cent. The 1 October and 10 December 2025 entries each recorded 0.00 percentage points and a 3.60 per cent target.
The 11 December 2024 entry recorded 0.00 percentage points and a 4.35 per cent target. The next listed entry, on 8 November 2023, raised the target by 0.25 percentage points to 4.35 per cent. The 8 February 2023 entry raised it by 0.25 percentage points to 3.35 per cent.
The low-anchor period around 2022 began with a 0.10 per cent target from 2 February 2022. The 4 May 2022 entry raised the target by 0.25 percentage points to 0.35 per cent.
The 8 June 2022 entry raised the target by 0.50 percentage points to 0.85 per cent. The 7 September entry raised the target by another 0.50 percentage points to 2.35 per cent. Those two 0.50 percentage-point increases are the largest single upward adjustments visible in the listed sequence. The 7 December entry raised it by 0.25 percentage points to 3.10 per cent.
Earlier reference points in the RBA table show three 1.00 percentage-point reductions. The 8 October 2008 entry resulted in a 6.00 per cent target. The 3 December 2008 entry resulted in a 4.25 per cent target. The 4 February 2009 entry resulted in a 3.25 per cent target.
How changes reach deposits and mortgages
The RBA describes the transmission process in direct terms:
“The cash rate and other capital market interest rates then feed through to the whole structure of deposit and lending rates.”
“In Australia, most deposits and loans are at variable or short-term fixed rates, so there is a high pass through of changes in the interest rates targeted by the Bank to deposit and lending rates.”
“But because of the other factors influencing capital market rates, and fluctuations in the level of competition in the banking sector, deposit and lending rates do not always move in lockstep with the interest rates targeted by the Bank.”
The cash rate is therefore an upstream policy rate. Capital-market interest rates sit between the RBA’s target and the wider structure of deposit and lending rates.
Australia’s high pass-through reflects the structure of the market. Most loans are either variable or short-term fixed. The RBA still separates high pass-through from uniform pass-through.
Other capital-market factors can alter the path. Competition in the banking sector can also affect lending and deposit rates. Those factors mean that the rates do not always change by an identical amount or at the same time.
Australian mortgage rates sit within the lending-rate side of that structure. The Monetary Policy Board sets the cash rate target, not individual mortgage rates. The RBA’s official account connects the two through high pass-through while retaining the lockstep qualification.
Applied to every decision in the table, the RBA evidence establishes the size of the target change and the resulting target level. It does not provide a corresponding mortgage-rate observation for each effective date.
A 0.25 percentage-point target increase does not establish a 0.25 percentage-point mortgage-rate increase. The RBA account gives no common repricing interval for lending rates. It states that pass-through is high and that lending rates do not always move in lockstep.
The same description applies to deposits. Most are variable or short-term fixed, and the RBA describes a high pass-through. Capital-market factors and banking competition still prevent a uniform movement.
What the sequence establishes
The recent target path contains distinct phases. The RBA records a 0.10 per cent target from 2 February 2022. The listed increases in 2022 and 2023 ended with a 4.35 per cent target on 8 November 2023. That target remained 4.35 per cent in the 11 December 2024 entry.
The 2025 reductions ended with a 3.60 per cent target on 13 August. The 1 October and 10 December entries retained 3.60 per cent. The 2026 increases ended with a 4.60 per cent target on 30 September.
Those are target outcomes. The RBA’s mortgage-rate evidence is a transmission account, not a matched historical series. High pass-through supports the link between policy and lending rates. The RBA’s lockstep qualification prevents any claim of an identical rate change, repricing date or outcome across loans.
Common questions
What is the RBA’s cash rate target?
It is a target for the interest rate on unsecured overnight loans between banks. The RBA identifies the cash rate as a near risk-free Australian-dollar benchmark and says it is known as AONIA in financial markets.
When does a cash rate target change take effect?
The RBA issues its media release at 2.30 pm after each Monetary Policy Board meeting. A change in the target takes effect on the following day.
Do mortgage and deposit rates always move in lockstep with the cash rate target?
No. The RBA describes a high pass-through from targeted interest rates to deposit and lending rates. It also states that capital-market factors and banking competition mean those rates do not always move in lockstep.
What inflation range does the RBA use?
The target for consumer price inflation is 2–3 per cent per annum. The Board balances that objective with its employment objective. It can also look through short-term deviations from the inflation range.
Why are the effects of monetary policy described as lagged?
The RBA says interest-rate changes affect economic activity and inflation with much longer lags. It attributes the lag to the time individuals and businesses need to adjust their behaviour.