What you need to know about the RBA's latest rate hike
Westpac and NAB have become the first banks to lift interest rates after the RBA’s decision to hike the official cash rate by a surprise 25 basis points on Tuesday.
thewest.com.auHere’s the latest on the RBA’s interest-rate activity.
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The Reserve Bank of Australia raised the official cash rate by 0.25 percentage point to 3.85% in February 2026, marking the first hike in more than two years. This decision came as inflation pressures remained above target, prompting a tighter stance. The move was broadly expected by markets and many economists.[1][3]
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In May 2026, the RBA again increased the cash rate to 4.35%, its third hike of the year, signaling that further rate rises could be needed if inflation stayed elevated. The governor indicated ongoing concern about inflation and acknowledged mortgage borrowers would face higher repayments.[4][10]
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Market and analyst commentary around these moves described a balancing act between cooling inflation and sustaining growth, with some forecasts calling for additional 25bp increases across 2026 if inflation remained stubborn.[7][8]
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For context, the RBA’s policy decisions are typically accompanied by a Statement on Monetary Policy (SMP) or accompanying communications that outline inflation expectations and the central bank’s outlook, guiding the likelihood of further hikes or pauses.[1]
If you want, I can pull the most recent official RBA statement or summarise the latest market reactions with a short bullet-point rundown.
Citations:
- RBA hike to 3.85% in February 2026.[3][1]
- May 2026 rate to 4.35% and remarks from the RBA governor.[10]
- Analyst commentary and outlook around ongoing rate expectations.[8][7]