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RBA holds cash rate, defying predictions

By Jack Campbell
08 July 2025 | 7 minute read
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The Reserve Bank of Australia has handed down its monetary policy decision for July, and held the cash rate at 3.85 per cent.

In an unexpected move, the RBA held rates steady at today’s meeting.

After a cut in February, a hold in April, a cut in May, and now another hold, the patterns have continued, despite most economists penning a 25bps cut in July.

 
 

With inflation at the lower end of the RBA’s coveted 2 per cent – 3 per cent range, sitting at 2.4 per cent, all four major banks and plenty of other economists expected some relief.

Industry heads have since come forward and noted this decision to hold doesn’t mean further cuts aren’t on the horizon.

“I’m sure borrowers and hopeful buyers will be disappointed by the Reserve Bank’s decision today to keep the nation’s official cash rate on hold at 3.85 per cent,” said Mortgage Choice CEO Anthony Waldron.

“Today's decision doesn’t mean further cuts are off the table. There are four monetary policy board meetings still to go this year, so rates could drop further.”

Stryd founder and CEO Ruth Hatherly said borrowers should still take the opportunity to review rates: "Now is the time for all home loan owners to review their rates with their brokers to ensure their rate is still the most competitive for their circumstances."

Connective’s executive director Mark Haron said borrowers will remain active as they anticipate further rate cuts.

“The RBA may have held steady today, but borrower expectations have not… This environment keeps competitive pricing and lender response times in sharp focus, which naturally positions brokers to guide their clients in navigating what this means for them,” said Haron.

“The expectation is that there is potential for one or two rate cuts before year-end, if inflation continues to moderate.”

While the Reserve Bank bucked the trend at this meeting, the August meeting could still see some action.

“If the June quarter Consumer Price Index (CPI) released later this month shows that inflation remains within the RBA’s target range, we could see the RBA deliver a cut at its August meeting,” said Waldron.

The tight labour market would have played heavily into the decision to hold, said Waldron. “Volatile” monthly CPI data is also a key reason, he added.

“The Reserve Bank will likely place more importance on the quarterly CPI figures, which will be released on 30 July, as it considers another cut to the cash rate,” Waldron said.

This article was first published on REB’s sister publication, Broker Daily.

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