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Australia Monetary Policy September 2025

Australia: Central Bank leaves rates unchanged in September

Latest bank decision: At its meeting on 30 September, the Central Bank decided to leave the cash rate at 3.60%, following 75 basis points of cuts earlier in the year.

Bank opts for cautious approach: The Bank decided to pause its easing cycle to assess the impact of past rate cuts, against a backdrop of recent signs of recovering private demand, a stable labor market and persistent inflation in some areas of the economy.

Rate cuts to continue: The Bank’s forward guidance was open-ended. Almost all our panelists forecast 25 basis points of further rate cuts later this year, though a few see rates unchanged. Further monetary easing is likely next year but should be mild, with our Consensus for a terminal cash rate of around 3%.

Panelist insight: On the outlook, Goldman Sachs analysts said:

“Overall, we still lean towards a rate cut at November’s Board meeting for several reasons. Firstly, we do not expect Q3 inflation to surprise sufficiently to the upside to derail the RBA’s medium term forecasts for on-target inflation. Second, we do not view the labour market as inflationary and expect conditions will continue to gradually soften. And third, we expect less restrictive policy settings will be required to sustain the rebalancing of growth towards the private sector.”

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