The Reserve Bank of Australia (RBA) raised the benchmark interest rate by 25 basis points to 3.85% following the February monetary policy meeting, citing a stronger-than-expected pulse of inflation. Governor Michele Bullock addressed the press, explaining the decision and fielding questions in a new reporting format introduced last year.
RBA Raises Interest Rate to 3.85%
The RBA board’s decision, announced Tuesday, was unanimous. The move follows data indicating inflationary pressures have picked up materially in the second half of 2025.
Key quotes from the RBA press conference
Inflation pulse is too strong.
We cannot allow inflation to get away from us again.
Did not discuss 50 bps rate rise.
Board will be cautious on rates.
Seeing some tightening in financial condtions through the A$.
Rising A$ is helpful at the margin.
Do not know if this will be a tightening cycle.
Can’t rule anything out or in.
Board will be very actively monitoring data.
According to the Monetary Policy Statement, inflation has fallen substantially since its peak in 2022, but picked up materially in the second half of 2025. The board judged that inflation is likely to remain above target for some time, making an increase in the cash rate appropriate.
The RBA forecasts a cash rate of 3.9% by June and 4.2% by December. Inflation forecasts have been raised out to the end of 2027. The assumed rise in the cash rate is expected to restore balance between demand and supply, though the economy is currently judged to be further from balance than previously assumed, growing above potential.
AUD/USD Reaction
The Australian Dollar experienced gains in immediate reaction to the RBA’s decision. The AUD/USD pair surpassed 0.7000, up 0.75% on the day, as of writing.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.11% | -0.05% | -0.08% | -0.80% | -0.34% | -0.15% | |
| EUR | 0.13% | 0.02% | 0.07% | 0.05% | -0.67% | -0.21% | -0.02% | |
| GBP | 0.11% | -0.02% | 0.09% | 0.03% | -0.68% | -0.23% | -0.04% | |
| JPY | 0.05% | -0.07% | -0.09% | -0.02% | -0.74% | -0.29% | -0.09% | |
| CAD | 0.08% | -0.05% | -0.03% | 0.02% | -0.72% | -0.26% | -0.07% | |
| AUD | 0.80% | 0.67% | 0.68% | 0.74% | 0.72% | 0.46% | 0.65% | |
| NZD | 0.34% | 0.21% | 0.23% | 0.29% | 0.26% | -0.46% | 0.19% | |
| CHF | 0.15% | 0.02% | 0.04% | 0.09% | 0.07% | -0.65% | -0.19% |
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).
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