Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, explaining the reasons behind leaving the benchmark interest rate unchanged at 4.35% after the August monetary policy meeting.
Bullock is taking questions from the press as part of a new reporting format introduced by the central bank last year.

Key quotes from the RBA Press Conference

The board hopes to slow the economy, sees upside risks to inflation.

Domestic economy still operating above capacity.
Expect period of subdued economic growth will be required to bring inflation down.
Still need to see progress before being confident on CPI.
We will raise rates again if needed.
Board is not ruling out further rate rises, need more information.
Board discussed raising rates.
Did not discuss a rate cut at the meeting only a raise or a stay.
While house prices have turned down, that is not the main game for us.
Housing market is not keeping us on hold.
Housing market is not a constraint on raising rates.
Thinking hard about when it might be appropriate to raise interest rates.
Arguments for hike include inflation still too high, upside risks from Middle East.
Board decided to wait for a bit more information, rate hike still front of mind.
We need slower growth and higher jobless to cool inflation.
Housing downturn not a massive risk to financial stability.

This section below was published at 04:30 GMT to cover the Reserve Bank of Australia's monetary policy announcements and the initial market reaction.

The Reserve Bank of Australia (RBA) board members decided to leave the Official Cash Rate (OCR) unchanged at 4.35%, following the conclusion of its August monetary policy meeting on Tuesday.

The decision came in line with market expectations.

The RBA extended the pause following three consecutive 25 basis points (bps) rate hikes earlier this year.

Summary of the RBA Monetary Policy Statement

While the impact of the middle east conflict on inflation has so far been less than expected, headline inflation is still too high.
Board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions.
Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of the increase reflected greater capacity pressures.
The board remains focused on ensuring that high inflation does not become embedded.
Trimmed mean inflation also remains elevated and is little changed from the March quarter.
Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise.
Short-term measures of inflation expectations have eased but remain higher than earlier in the year.
Inflation is still too high.
Labour market leading indicators point to only limited easing in the near term.
With monetary policy judged to be somewhat restrictive, the board decided to leave the cash rate target unchanged while it assesses how the economy is evolving.
Resolution of the Middle East conflict remains uncertain, and there are scenarios where inflation is higher and activity lower than forecast.
Inflation not expected to return to around the midpoint of the target range until late 2027 and there are upside risks to this projection.
Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected.

RBA’s Statement on Monetary Policy

Trimmed mean inflation to remain above 3% until mid-2027, return to 2.5% by early 2028.

Financial conditions in Australia appear to be somewhat restrictive.
Inflation still elevated, risks skewed to upside.
RBA pares inflation forecasts, sees slightly higher unemployment.
Economy expected to move back into balance in 2027, little earlier than previously estimated.
Assumption for potential economic growth has been revised slightly higher on population growth.
Sees trimmed mean inflation at 3.3% Q4 2026, 2.6% Q4 2027, 2.4% Q4 2028.
RBA nudges up GDP forecasts on stronger business investment, population growth.
Sees GDP growth at 1.4% Q4 2026, 1.6% Q4 2027, 1.8% Q4 2028.
Sees CPI inflation at 3.6% Q4 2027, 2.6% Q4 2027, 2.4% Q4 2028.
Sees unemployment at 4.5% Q4 2026, 4.7% Q4 2027, 4.8% Q4 2028.
Forecasts make technical assumption of cash rate at 4.4% Q4 2026, 4.5% Q4 2027, 4.4% Q4 2028.
Labour market still a little tight, seen stable near term before easing gradually.
Recent government budgets have not changed outlook for public demand.
Housing market has softened by more than expected, loan growth to slow further.
Outlook for global growth revised higher given ai boom, resilience to gulf conflict.

AUD/USD reaction to the RBA interest rate decision

The Australian Dollar reacts little to the RBA’s decision. At the time of writing, the AUD/USD pair is down 0.10% on the day at 0.7049.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the New Zealand Dollar.

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

This section below was published on August 11 at 00:30 GMT as a preview of the Reserve Bank of Australia's monetary policy announcements.

• The Reserve Bank of Australia is set to hold the interest rate unchanged at 4.35% in August.
• Eyes on RBA Governor Bullock and updated forecasts for clues on the next policy move.
• The Australian Dollar braces for volatility on the RBA policy announcement.

The Reserve Bank of Australia (RBA) is on track to keep the Official Cash Rate (OCR) steady at 4.35% for the second consecutive meeting on Tuesday.

The decision will be announced at 04:30 GMT, accompanied by the Monetary Policy Statement (MPS) and updated economic forecasts. RBA Governor Michele Bullock’s press conference will follow at 05:30 GMT.

The Australian Dollar (AUD) is set to experience volatility around the RBA policy announcement and Bullock’s press conference, with markets focused less on the widely expected hold and more on signals about the central bank’s next policy move, as softer-than-expected inflation data could cloud the central bank’s outlook on interest rates.

RBA set for another pause, what’s next?

While markets had previously priced in the possibility of another rate hike in August, expectations have shifted dramatically following a softer-than-expected second-quarter (Q2) inflation report, reducing the urgency for the RBA to tighten policy again.

The turning point came with Australia's latest Consumer Price Index (CPI) report, which showed underlying inflation slowing more than expected.

The RBA's preferred Trimmed Mean CPI rose 0.8% quarter-on-quarter (QoQ) in the second quarter, below market expectations for a 0.9% increase. Annual Trimmed Mean inflation accelerated only modestly to 3.6% from 3.5%, remaining below the central bank's own 3.8% forecast.

Following the CPI release, Bloomberg data showed that the implied probability of a rate hike in August collapsed to just 4%, down from more than 20% before the data.

Expectations for a fourth rate hike later this year also receded sharply, with market pricing falling below 50%, compared with roughly 84% pre-data release.

This swift repricing suggests markets increasingly believe the RBA has room to remain patient, while assessing whether recent signs of easing inflation are sufficient to pause the tightening cycle.

Even though headline inflation benefited from lower fuel prices during June, Oil prices moved higher again after a renewed outbreak of conflict involving Iran during July.

Additionally, Australia's temporary fuel excise discount expired on August 2, removing a temporary source of downward pressure on fuel prices and potentially adding fresh upside risks for inflation in the months ahead.

Against this backdrop, the RBA is likely to adopt a cautious tone, maintaining a data-dependent approach, as policymakers continue to balance slowing economic momentum against still-elevated price pressures.

Additionally, the RBA could consider the updated inflation and growth forecasts and whether the likely reopening of the Strait of Hormuz is enough to calm inflation concerns and to signal a pause in the current tightening cycle.

RBA seen on hold as summer lull keeps focus on data

Analysts at Rabobank note that attention turns to Australia on Tuesday, when “the Reserve Bank of Australia sets rates.” They acknowledge that they are “not entirely convinced that the three hikes delivered since the start of the year are enough to mop up excess demand in the Australian economy, but the RBA seems to hope it is.” Even so, Rabobank expects policymakers to “hold rates unchanged this week,” a view they point out is shared by “all other 31 economists surveyed by Bloomberg.” More broadly, the bank highlights that “it’s peak summer, with a light data calendar and most central bankers on holiday,” adding that “the Fed’s Hammack is an exception.”

How will the Reserve Bank of Australia’s decision impact AUD/USD?

The AUD is hanging close to seven-week highs against the US Dollar (USD) ahead of Tuesday’s RBA policy announcements.

With a rate hold largely priced in, the policy statement and updated forecasts, alongside Governor Bullock’s message, will likely matter more than the rate decision itself.

If Bullock and the MPS acknowledge softer inflation while emphasizing patience and data dependence, that could reinforce expectations that interest rates have peaked, potentially weighing on the Aussie Dollar and the AUD/USD pair.

Alternatively, if inflation forecasts are revised higher, followed by Bullock’s still concerning remarks on inflation, it could leave further rate hikes on the table, providing fresh support to AUD/USD.

Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD following the policy announcement.

“The Aussie pair trades firmly above the short- and medium-term moving averages. The 21-day and 50-day Simple Moving Averages (SMAs) bullish crossover underpins the advance, while the 200-day SMA at 0.6926 reinforces the broader bullish structure. The Relative Strength Index (RSI) near 60 leans higher but remains shy of overbought territory, suggesting upside momentum remains constructive on the daily chart.”

“On the topside, immediate resistance is located at the 0.7100 round level, which could act as the next pivot for trend continuation. Further up, the June 5 high near 0.7145 could be tested. On the downside, initial support is seen around 0.7000, the confluence zone of the 21-day SMA and 50-day SMA. Below that, the 200-day SMA at 0.6926 could act as a deeper line of defense,” Dhwani adds.

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.