RBA minutes confirm unanimous hike to 4.6%, further tightening possible

what happened

Minutes of the Reserve Bank of Australia’s September meeting showed that the board unanimously increased the cash rate by 25 basis points to 4.6%. Policymakers said additional tightening remained possible as inflation risks continued to prove persistent.

Seeking Alpha reported that the upside risks identified in August had started to emerge. The RBA pointed to Middle East geopolitical tensions that pushed oil prices above forecasts, ongoing global cost pressures partly linked to AI-driven demand, and resilient domestic activity. The latest inflation figures also exceeded expectations, reflecting broad pass-through of higher business costs into prices.

Short-term inflation expectations stayed elevated, prompting concern that they could drift higher over the medium term. Although labor-market conditions weakened as expected, demand remained firm and pressure on production capacity was greater than previously assessed. Board members said delaying rate increases risked entrenching inflation after a prolonged period above target, while leaving rates unchanged could weigh on the Australian dollar as peer central banks continued to tighten policy.

Separate data showed that Australia’s NAB Business Confidence Index fell to -13 in September 2026 from a revised -9 in August. The reading was the lowest since May and marked a seventh consecutive month of negative sentiment. The benchmark declined 21 points, or 0.2%, to 8,762 in early Tuesday trading, while the Australian dollar traded below $0.70 near multi-month lows as investors reviewed the RBA minutes.

why it matters

The minutes reinforce a hawkish policy signal for the Australian dollar, while weaker business confidence and the lower equity benchmark indicate that restrictive policy is weighing on sentiment and domestic assets.

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