Monetary Policy Decision

Media Conference – 30 SEPTEMBER 2025

Decision
The cash rate target was unchanged at 3.60 per cent. The policy decision was unanimous.

Inflation
In the June quarter, trimmed mean (underlying) inflation was 2.7 per cent, while headline inflation was 2.1 per cent. Both measures were within the 2–3 per cent target range. Recent data indicates that inflation in the September quarter may be higher than previously expected since the decline in underlying inflation has shown slower pace.

Economic and Labour Market Conditions
Data for the June quarter indicate that private demand is picking up slightly faster than expected. Labour market conditions have remained broadly steady and somewhat tight. Employment growth has slowed a little more than anticipated, while the unemployment rate stays at 4.2 per cent as in August. Wage growth has slowed from its peak, whereas productivity growth has remained weak and unit labour costs continue to rise. Uncertainties arise regarding the lags in how recent monetary policy easing affects domestic economy. Global economic uncertainty remains elevated. There is slightly more clarity on US tariffs and policy responses from other countries, which reduces the risk of extreme outcomes.

Monetary Policy Stance
With private demand recovering, persistent inflation in some areas and stable labour market conditions, the Board decided that it was appropriate to keep the cash rate target unchanged. While financial conditions have eased, the full effects of earlier rate cuts will take time. The Board remains cautious to the heightened level of uncertainty to ensure price stability and full employment.