Australia's RBA lifts rates to 4.85%, the highest since 2008, in a split 6–3 vote
The fifth hike of 2026 comes as the central bank pushes back its inflation timeline by about three quarters, citing Middle East energy prices and AI-driven investment.
TL;DR
- The Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.85% on Nov. 3, 2026, effective Nov. 4.
- The vote was 6–3: three Monetary Policy Board members wanted to hold at 4.60%.
- The RBA now does not expect inflation to reach the top of its 2–3% target until late 2027, around three quarters later than previously forecast.
- It is the fifth increase of 2026 and the highest cash rate since late 2008, ABC News reported.
The Reserve Bank of Australia is not done tightening. Its Monetary Policy Board raised the cash rate target by 25 basis points to 4.85% on Nov. 3, 2026, taking effect on Nov. 4.
The decision was not unanimous. Six members voted for the increase and three voted to keep the rate at 4.60%, the RBA said.
Inflation is taking longer to beat
"Inflation remains elevated and recent data indicate that it is broadly based," the board said. Inflation is now forecast to remain elevated through much of 2027 and is not expected to reach the top of the 2–3% target range until late 2027, "around three quarters later than previously forecast."
The RBA pointed to higher fuel and commodity prices linked to the conflict in the Middle East. It also flagged a newer driver: "AI-related investment is driving rapid growth in prices for technology-related goods."
Fifth hike of the year
According to the RBA's cash rate table, the target has risen from 3.60% at the end of 2025 to 4.85% in five steps. ABC News said it is the highest cash rate since late 2008.
The board said the economy is slowing, housing prices have fallen significantly and unemployment has risen. ABC News reported the RBA now expects unemployment to average 5.1% in the December quarter of 2028, up from 4.8% in its August forecast; the current rate is 4.7%.
"We are not looking to tip the economy into recession if we can avoid it," Governor Michele Bullock said, per ABC News. "But we do need to get inflation down."
What it means for crypto and fintech teams – Analysis
A central bank naming AI investment as an inflation driver is new territory. The AI build-out is no longer just a stock-market story; it is showing up in rate decisions. Higher-for-longer policy in a major economy keeps the cost of capital elevated, which matters for anyone raising money or pricing yield products. A 6–3 split also shows the board is near the edge of what it is willing to do. This is not investment advice.
FAQ
What did the RBA decide on Nov. 3, 2026?
It raised the cash rate target by 25 basis points to 4.85%, effective Nov. 4, 2026.
Was the decision unanimous?
No. Six members voted to raise rates and three voted to hold at 4.60%.
Why did the RBA hike?
It said inflation remains elevated and broadly based, and now forecasts it to reach the top of the 2–3% target only in late 2027, partly due to higher fuel prices from the Middle East conflict and AI-related investment.
How high is the cash rate historically?
ABC News reported 4.85% is the highest cash rate since late 2008.
Sources
News summary based on the sources above. Not investment, legal or tax advice. Editorial policy & corrections · Report an error
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