By Dannielle Maguire
The Reserve Bank of Australia (RBA) will meet again this month, with the board to make a decision about whether or not to change the cash rate target.
The decisions of the board impact the budgets of many Australians — either directly or indirectly — so it’s a pretty big deal.
These meetings happen eight times a year so every month or so there’s another update.
Let’s get up to speed on where we’re at and what to expect.
When will the RBA meet next?
The RBA board has a two-day meeting on Monday and Tuesday.
Will there be a rate cut?
No-one can say for sure, but many economists are predicting a cash rate cut on Tuesday.
For example, Reuters asked 37 economists and 31 of them are banking on a cut this week — the other six reckon rates won’t change at this meeting.
What is the cash rate target?
Currently, the cash rate target is 3.85 per cent.
This figure is often referred to as “the interest rate” in conversation, but it’s not the rate people with mortgages pay.
“The cash rate is the interest rate that banks pay to borrow funds from other banks in the money market overnight,” the RBA’s website says.
“It influences all other interest rates, including mortgage and deposit rates.”
That’s why, if you’re paying interest on a loan, your interest rate is probably higher than 3.85 per cent.
When the RBA changes the cash rate target, interest rates for mortgages don’t automatically change — the individual banks decide that.
How much will the cash rate be cut by?
We’re expecting rates to be cut by 0.25 per cent.
That would take the new cash rate down to 3.6 per cent.
When will we know if there’s a rate cut?
Not until the Tuesday afternoon.
Typically, the RBA publishes its decision at about 2:30pm AEST — this happens after every meeting.
The ABC team will be live blogging the RBA announcement right here on our website.
When will interest rates go down?
If the RBA does cut rates, it’ll be up to the banks to decide if they’ll pass that cut on to customers.
So if you have a mortgage, you’ll have to wait to hear from your lending institution about whether your rates are changing.
We typically hear from the major banks within a few hours of the RBA’s decision though — so you probably won’t have to wait very long.
Will there be more cuts this year?
Again, we can’t say for sure, but we can look to economists for their predictions.
Here’s what the major banks say:
ANZ: Expects rates to be cut to 3.35 per cent in August Commonwealth: Expects rates to be cut to 3.35 per cent in August NAB: Predicts rates will go down to 3.35 per cent this quarter and will go down to 3.1 per cent in December Westpac: Expects rates to be cut to 3.35 per cent by the end of the year
How many rate cuts have there been this year?
The RBA board cut the cash rate from 4.35 to 4.1 after the meeting in February.
It cut it again after the most recent meeting in May, lowering it to 3.85.
What are RBA’s 2025 meeting dates?
The RBA will meet eight times this year.
Here are the dates listed on the Reserve Bank’s website:
July 7 and 8August 11 and 12September 29 and 30November 3 and 4December 8 and 9