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# Reserve Bank of Australia Holds Cash Rate at 3.85%, Surprising Markets Expecting a Third Cut
- URL: https://www.theglobalbanker.com/rba-holds-cash-rate-3-85-july-2025-surprises-markets/
- Published: 2025-07-08T10:04:00.000Z
- Updated: 2026-10-27T09:06:17.000Z
- Description: The Reserve Bank of Australia kept its cash rate at 3.85% in July 2025, defying expectations of a third cut in the easing cycle as a 6-3 board majority chose to wait for more information confirming that inflation remains on track.
- Author: TGB Editorial Team
- Tags: Central Banks, Asia-Pacific, #archive

The Reserve Bank of Australia held its cash rate at 3.85% at its July 2025 board meeting, a decision that surprised a majority of economists who had expected the central bank to deliver a third reduction of the cycle. The board, split 6-3, said it could wait for a little more information to confirm that inflation remains on track to reach 2.5 per cent on a sustainable basis, noting that labour market conditions remained tight.

The RBA had cut rates in February and again in May, at its previous meeting. 

#### INFLATION ASSESSMENT

The RBA acknowledged that inflation had fallen substantially since its 2022 peak, although some June-quarter indicators had come in slightly stronger than expected. 

#### BOARD OUTLOOK

The board indicated that it would continue to monitor incoming data carefully and had not ruled out further cuts.