What is the cash rate?
The interest rate banks charge each other for overnight loans, which the Reserve Bank steers to cool or warm the economy.
When it moves, your bank usually moves your variable home loan and savings rate soon after.
The rule
- The Reserve Bank's Monetary Policy Board sets the target for the cash rate. It has nine members: the Governor, the Deputy Governor, the Treasury Secretary and six people appointed by the Treasurer.
- It meets eight times a year. Decisions go by majority, and the Chair has a casting vote.
- Its goals are price stability and full employment. The inflation target is 2 to 3%.
- On 3 November 2026 the Board raised the cash rate 25 points to 4.85%, by six votes to three. The next decision is on 8 December 2026.
What people ask
Why does a rate rise help with inflation?
Higher repayments leave people with less to spend, and saving pays a little more. Less spending eases pressure on prices. It works slowly and through several channels, the Reserve Bank says.
Does my bank have to follow the cash rate?
No. Your lender sets your rate. Variable rates usually follow the cash rate soon after a move, but the bank decides how much and when.
How much did interest rates go up in 2026?
The cash rate rose from 3.60% to 4.85% across five rises in 2026, the last decided on 3 November.
What is quantitative tightening?
The other lever. During the pandemic the Reserve Bank's operations put nearly $500 billion of reserves into banks. As the bonds it holds mature, about $20 to 40 billion a year drains back out, the Bank said in August 2026.