Australia's central bank lowers cash rate target by 25 bps to 3.60%

12 Aug '25

1 min read

Australia's central bank lowers cash rate target by 25 bps to 3.60%

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Australia's central bank has decided to lower the cash rate target by 25 basis points to 3.60 per cent.
It said it was appropriate to lower the cash rate as inflation is expected to remain around target.
However, it remains cautious due to high uncertainty in the global economy.
The unemployment rate has increased a little but remains low.
It expects the domestic economy to grow over the next year.

The monetary policy board of the Reserve Bank of Australia (RBA) has decided to lower the cash rate target by 25 basis points to 3.60 per cent.

It said it was appropriate to lower the cash rate because inflation is expected to remain around target. However, it remains cautious due to high uncertainty in the global economy.

Inflation has continued to come down and is within the central bank’s target range of 2-3 per cent. The unemployment rate has increased a little but remains low. It expects the domestic economy to grow over the next year.

Although growth in the economy has slowed, spending by households and businesses has increased by more than expected over recent months, the bank said in a release.

Recent interest rate cuts are expected to support spending by households and businesses.

While global economic growth is expected to slow, the risks of a very damaging trade war have eased a bit and the effect on growth in Australia is currently expected to be limited, the bank noted.

It expects un employment to stabilise slightly below 4.25 per cent, and for jobs growth to slow from very high rates.

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