The Reserve Bank of Australia (RBA) have increased its cash rate target today by 25 basis points or 0.25%. The new cash rate target effective from September 30 , 2026 will be 4.60%.

The Monetary Policy Board have acknowledged that the upside risks to inflation have materialised which led them to the conclusion that it was necesarry for them to increase the interest rate to curb down spending which then helps to decrease aggregate demand, hence decreasing inflation. The latest June 2026 inflation reading shows a 3.5% annual increase in general price levels in Australia which is well above the 2-3% target range set by the RBA.

The other side of the mandate is to promote maximun employment. Although the central bank haven’t explicity defined a certain target range for the unemployment rate but the board has claimed that current unemployment level is really low from historical standard and near to full employment. The current unemployment rate stands at 4.6% as of August 2026.

Sources:
https://www.rba.gov.au/media-releases/2026/mr-26-27.html
https://www.abs.gov.au/