RBA Eases Up: Cash Rate Cut to 3.60% on Cooling Inflation and Job Concerns

Reducing its official cash rate by 25 basis points today, the Reserve Bank of Australia lowered it from 3.85% to 3.60%. All members of the Monetary Policy Board unanimously supported the choice, which was made public on August 12, 2025, therefore highlighting a shared belief that monetary policy should be eased.

Australia's inflation rate slowed to 2.1%, only over the RBA's 2–3% target range, and the unemployment rate reached 4.3%, the highest in 3 ½ years. Soft economic momentum and reduced pricing pressures are reflected in these indicators; therefore, the bank is justified in cutting borrowing rates to promote job and growth.

In its most recent predictions, the RBA indicated an ongoing softening bias. Most major Australian banks now expect another rate decrease, projecting the cash rate could soften to about 3.35% by December 2025 if inflation keeps on moderating and labour market conditions remain shaky.