The Reserve Bank of Australia left its cash rate unchanged at 3.60% at its December 2025 monetary policy meeting, the last scheduled rate decision of the calendar year. The decision was unanimous, the bank confirmed in a statement published on its website, marking a cautious and deliberate close to a year in which the RBA had moved policy materially from its prior stance.
Over the course of 2025 the RBA delivered three rate reductions while choosing to hold at five separate meetings, producing a cumulative easing of 75 basis points across the year as a whole. The December hold means the board opted to consolidate those gains rather than add a further reduction before the new year, a choice that reflects ongoing and careful assessment of the domestic economic trajectory, including inflation trends, labour market conditions, and household spending patterns.
A YEAR OF MEASURED POLICY EASING
The 75 basis points of cumulative cuts delivered in 2025 represented a meaningful and deliberate shift away from the tightening cycle that had preceded it, during which the RBA had raised the cash rate substantially to bring inflation back towards its target band. Three reductions spread across the year, interspersed with five holds, underscore that the board moved with care rather than urgency, calibrating each individual decision against incoming data on consumer prices, wages growth, and the broader state of economic activity.
The cash rate at 3.60% remains well above the emergency lows that characterised the early years of the decade, preserving the RBA's ability to manoeuvre in either direction should conditions warrant. The unanimous nature of the December decision signals that board members were aligned on the appropriateness of pausing at this level to end the year, rather than risking an additional cut that might have appeared premature given residual uncertainties about the inflation outlook and external headwinds facing the Australian economy.
Australian households with variable-rate mortgages have been among the most directly affected by the policy moves of recent years, as the cumulative rise and subsequent partial reversal of the cash rate fed through into monthly repayment obligations. The three cuts delivered in 2025 provided incremental relief, though the net level of the cash rate still represents a significant increase relative to the pandemic-era lows that many borrowers experienced when they first entered the property market.
OUTLOOK AS THE NEW YEAR APPROACHES
With the December meeting now concluded, attention turns to the RBA's first scheduled policy decision of 2026, at which policymakers will assess whether the cumulative effect of this year's easing and the continued evolution of inflation and employment data justify any further adjustment to the cash rate. The bank has not signalled a predetermined path forward, leaving market participants and economists to weigh the available evidence about how quickly the 75 basis points of 2025 easing is transmitting through to economic conditions.
The RBA's communication throughout 2025 has consistently emphasised a data-dependent approach, a posture broadly consistent with that of other major central banks navigating the final stages of post-pandemic inflation normalisation. Australian businesses and financial institutions will monitor the early 2026 data releases — particularly consumer price index updates and labour force statistics — as the clearest guides to the likely direction and timing of the RBA's next move.