The Reserve Bank of Australia has increased the cash rate by 25 basis points, taking it to 4.10%. It’s the second rate rise in a row, showing the RBA is still focused on keeping inflation under control. For borrowers and households, the change gives a clearer sense of where the RBA sees the economy right now. While the cash rate does not directly set every loan rate, it plays an important role in shaping borrowing costs more broadly across the market.
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Current RBA cash rate
In its update, the RBA said inflation pressures have strengthened in recent months and may take longer to return to its target range. Higher fuel prices, linked to global conflicts, have added to those concerns, particularly if they continue to flow through to the broader economy.
The Board also pointed to signs that parts of the economy are still holding up firmly. Demand has been stronger than expected, the labour market remains relatively tight, and housing market activity has stayed solid. Taken together, those conditions can make it harder to bring inflation down quickly.
The decision was closely split, with five Board members voting to raise rates and four voting to leave them unchanged. That suggests there is still uncertainty around the outlook, and future decisions will depend on how inflation, employment, consumer demand and global conditions evolve from here.
Read the RBA’s full announcement here.
Median settled vehicle loan rate on Driva's lender panel
Despite the first cash rate increase in February, Driva’s lender panel for vehicle loans has remained steady at 11.35% for another month. With the second rate increase, now could be a great time to lock in your lowest rate on a new set of wheels.
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