The Reserve Bank of Australia Raised Cash Rate by 25bps to 2.6% 

The Reserve Bank of Australia raised the cash rate by 25bps to 2.6% during its October 2022 meeting, defying market estimates of a 50bps hike while bringing the cash rate to a level not seen since July 2013. The move followed a 50-bps hike each in the prior four months and a 25-bps rise in May. The board said that inflation in Australia was too high, as was the case in most countries, and that a further increase is expected over the months ahead. 

Annual inflation has been hovering at about 7% in recent months and the central bank and the federal government have said they expect it to peak below 8% by the end of 2022. Data released earlier on Tuesday indicated Australia’s economy remained resilient despite five RBA rate rises since its cycle began just prior to May’s federal election. For borrowers this is still bad news – mortgage repayments will go up, leaving less money in the household kitty for other essentials such as groceries and fuel.

Prior to today’s RBA decision, markets have been expecting the cash rate would continue to rise and exceed 4% by mid-2023. Commercial bank economists were less hawkish, forecasting a peak cash rate of between 2.85% and 3.35%. It’s the steepest rate hiking cycle since 1994 as the RBA moves to counter soaring inflation and quell consumer demand.


the Guardian. (2022a). Interest rates rise again as Reserve Bank lifts cash rate to 2.6%. [online] Available at: [Accessed 4 Oct. 2022]. (n.d.). Explained: Why are Australia’s interest rates still rising? [online] Available at: [Accessed 4 Oct. 2022].

Trading Economics (2022). Australia Interest Rate. [online] Available at:

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