Latest Cash Rate Decision
August 12, 2025
3.60%
Decreased by 0.25%
The RBA Board unanimously decided to lower the cash rate by 25 basis points, expecting potential further gradual reductions over the coming year.
2.5%
Expected Underlying Inflation
4.3%
Unemployment Rate (June)
~3%
Headline Inflation (Late 2025)
Economic Observations
- Global trade policy uncertainty has slightly declined
- Australian GDP growth showing signs of gradual recovery
- Financial conditions have eased since the start of the year
- Current monetary policy stance remains somewhat restrictive
Inflation Outlook
- Underlying inflation expected to be around 2.5% over the forecast period
- Inflation forecast to return to midpoint of 2-3% target range
- Headline inflation expected to temporarily rise to ~3% in late 2025
- Inflation pressures continuing to moderate as expected
Employment Situation
- Unemployment rate at 4.3% in June 2025
- Expected to remain around current level
- Labor market conditions still slightly tight but showing signs of easing
- Board committed to balancing full employment with inflation targets
Forward Guidance
- Future cash rate reductions will be data-dependent
- Board aims to balance full employment and inflation targets
- Open to adjusting pace of rate cuts based on incoming economic data
- Monitoring risks to economic forecast in both directions
- Board emphasized the need to remain "attentive to the data"
What This Means for Your Mortgage
The cash rate reduction is good news for mortgage holders. While banks don't always pass on the full rate cut immediately, this decision typically leads to lower variable mortgage rates within days or weeks.
For homeowners: If you're on a variable rate, you may see reduced monthly repayments. If you're considering buying or refinancing, this creates opportunities to secure better rates.
For investors: Lower rates can improve cash flow on investment properties and potentially increase borrowing capacity.
Want to Read the Full Minutes?
Read Full RBA Board Minutes
Visit the official Reserve Bank of Australia website for complete meeting minutes and detailed economic analysis.
This summary reflects the RBA Board meeting held on August 12, 2025.
Minutes are typically released two weeks after each meeting.