Canberra, September 29 (QNA) - The Reserve Bank of Australia (RBA) raised its cash rate target by 25 basis points to 4.6% from 4.35%, taking borrowing costs to their highest level in 15 years as the central bank steps up efforts to contain persistent inflationary pressures.
The increase marks the RBA's fourth rate hike this year and brings the total increase in borrowing costs in 2026 to one percentage point. The decision comes as underlying inflation remains at 3.6%, above the central bank's 2-3% target range, with the RBA warning that inflationary risks remain elevated.
The rate hike is set to further squeeze mortgage holders, particularly households carrying large home loans, as higher borrowing costs put additional pressure on household budgets. The 4.6% cash rate is the highest level faced by a generation of borrowers whose mortgages were taken out after 2011.
The impact will not be uniformly negative for households, however. Savers with high-interest deposit accounts could benefit from higher returns if banks pass on the RBA's increase by raising deposit rates, although lenders ultimately determine how much of the increase is passed through to customers. (QNA)