This is an archived update from June 2026. For the current cash rate and the most recent decision, see our rate updates page.
- Cash rate: 4.35%
- Decision: hold, unanimous
- Announced: 16 June 2026
What the Board decided
The Reserve Bank left the cash rate at 4.35% on 16 June 2026. The decision was unanimous, and it was the first hold of the year, after increases in February, March and May took the rate up by a total of 0.75% from 3.60%.
The Board said headline and underlying inflation were both still too high. Inflation had picked up materially through the second half of 2025, and the data since the start of 2026 confirmed that part of that increase came from capacity pressures in the economy rather than one off price shocks. Oil prices had eased in the weeks before the meeting, but energy and most related commodity prices were still above where they sat before the conflict in the Middle East began. The Board also noted that some businesses facing higher costs had already put their prices up and others were looking to do the same.
The most closely read part of the statement was the last sentence. The Board added wording about increasing the cash rate target further if required, which had not been there before. It was a short addition, and it was taken as a deliberate signal.
What the economists said
The hold itself was no surprise. Economists at all four major banks had picked it, and financial markets had been pricing essentially no chance of a change since the May increase was announced. After that May meeting, Governor Michele Bullock had described the cash rate at 4.35% as “a bit restrictive”, which gave the Board room to pause and watch how the earlier increases were working through.
The disagreement was about what came next. Westpac read the new sentence in the statement as an unusually strong steer and kept its view that more increases were coming, with the next one likely in August if June quarter inflation came in strong. CBA took the other side, expecting the cash rate to stay on hold into 2027, with a resolution to the Middle East conflict the swing factor.
For context on what was at stake, Canstar calculated that another 0.25% increase would add about $122 a month to repayments on an $800,000 loan.
Our broker’s take
Chief executive and founder of mortgage broker Well Money, Scott Spencer, says a pause after three increases is not the same thing as the end of them. “Three rises in four months is a lot to absorb, and plenty of people have not felt the full effect of the May one yet, because it takes a billing cycle or two to show up properly. A pause gives you a breather. It does not give you a discount.”
He says the added line in the statement is worth taking at face value. “The Reserve Bank does not put a sentence like that in by accident. I would not be building a budget on the assumption that 4.35% is the top.”
His advice for anyone finding the repayments tight after three increases is to move early. “The worst thing you can do is wait until you have missed one. Talk to someone while you still have options, because you have a lot more of them before something goes wrong than after.”
That is the part we do for a living. We are mortgage brokers, so we compare across a panel of bank and non-bank lenders, and we know how each one reads a file. Call us on 1300 899 724 or book a time to talk it through.