RBA lifts the cash rate for first time since 2023

The Reserve Bank of Australia (RBA) has lifted the official cash rate by 25 basis points to 3.85% at its board first meeting in 2026.

- Eliza Bavin

The RBA had either cut or kept the cash rate on hold for the past 17 consecutive meetings.

In announcing the decision, RBA governor Michele Bullock said persistent inflation concerns led to the rise.

"While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025," Bullock said.

"The board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures. As a result, the board considers that inflation is likely to remain above target for some time."

VanEck head of investments and capital markets Russel Chesler said the RBA had no real choice but to pull the trigger on higher interest rates.