The Reserve Bank of Australia (RBA) has delivered its third interest rate hike of 2026, raising the cash rate by 0.25 percentage points to 4.35 per cent as it continues efforts to rein in inflation.
The decision, announced on Tuesday afternoon, returns the cash rate to the level it held prior to last year’s series of cuts, signalling a renewed tightening cycle amid ongoing price pressures in the economy.
In a statement, the RBA confirmed the move was backed by a strong majority of its interest rate setting board, with eight members voting in favour of the increase and one opting to hold the rate at 4.10 per cent.
“Today’s policy decision was made by majority: eight members voted to increase the cash rate target by 25 basis points to 4.35 per cent; one member voted to leave the cash rate target unchanged at 4.10 per cent,” the statement read.
The rate rise comes against a backdrop of global uncertainty, with the local share market opening lower following an overnight spike in oil prices linked to escalating tensions in the Middle East. The United Arab Emirates government said it had intercepted Iranian missiles for the first time since a ceasefire between the United States and Iran.
The RBA’s latest move underscores its ongoing concern about inflationary risks, despite earlier expectations that the tightening cycle may have peaked. Economists had anticipated the possibility of another split decision, but the 8–1 vote suggests a growing consensus within the board that further action was required.
The increase is likely to place additional pressure on borrowers, particularly mortgage holders, while reinforcing the central bank’s commitment to returning inflation to its target range.
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