Rba Will Keep Rates Steady

Rba Will Keep Rates Steady by Ashly Chole last updated on September 05, 2026

RBA Will Keep Rates Steady At 4.35% - Goldman Sachs

According to Goldman Sachs, the RBA is likely to hold rates steady through 2026. So, the interest rate is likely to stay near 4.35% for the next few months.

As things stand right now, the RBA has the more restrictive policy among the G10 economies. However, Goldman Sachs thinks the tightening has not ended but just paused for now.

Higher Cash Rate Supports Australian Dollar

The restrictive policy of the RBA has already benefited the Australian Dollar. The AUD is up by 8.72% over one year against the USD.

Goldman Sachs commented that the current cash rate is enough to bring down inflation. But it will depend on whether the economy follows the forecasts of the RBA.

RBA has forecast that inflation will be near 3.2% in Q4. That's around 0.3% higher than Goldman's forecasts.

Things like housing data, the labor market, and softer inflation will allow the RBA to keep rates steady. For the next year, Goldman Sachs thinks the bank will be tilted towards a rate hike rather than a rate cut.

Also, the effects of the last three rate hikes have yet to work through the economy. So, the RBA is likely waiting for data to see the real impact of the last 3 rate hikes.

Once the RBA has some evidence of the impact of rate hikes, they will decide the next course of action. But given the inflation and the economic conditions, the next course of action will be another rate hike.

The RBA believes that there is a risk of higher inflation. That's why they will wait and see what the data tells them.

At this stage, a higher interest rate means the AUD will stay strong against the USD and other currencies. Meanwhile, a higher inflation reading will further strengthen the AUD as it means more rate hikes.

According to various analysts, the average exchange rate for AUD/USD for Q4 is 0.71. By Q2 2027, the AUD/USD target is set at 0.73.