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.