Reserve Bank of Australia (RBA) Governor Michele Bullock is addressing the press conference, explaining the reasons behind raising the benchmark interest rate by 25 basis points (bps) to 4.10% after the March monetary policy meeting.
Bullock is responding to media questions as part of a new reporting format for the central bank that began last year.
Key quotes from the RBA press conference
Higher petrol prices not reason for today’s rate rise.
Risks to inflation to the upside.
Cash rate was not high enough to bring inflation back to target.
Had a very robust meeting.
Considered whether to hold off until May.
Discussion was about timing not direction of policy.
All members agreed inflation was too high.
Difference was in timing, those voting against still felt need for an eventual rate rise.
Middle east uncertainty was a big thing in discussion.
Issue was not direction, but timing.
Risks more on upside for inflation than downside for employment.
Do not want to see recession or large rise in unemployment.
Understand this is tough news for people with mortgages.
If we dont bring excess demand down, business will build that into costs and prices.
Board alert to risks from middle east, if have to change track we will.
Split decision shows board actively debates and challenges.
Today’s hike does not say anything about forward path.
Forward path for rates is uncertain.
Markets misinterpreted deputy governor, he was not signalling a hike.
Higher a$ is helpful in bringing down inflation.
This section below was published at 03:30 GMT to cover the Reserve Bank of Australia’s monetary policy announcements and the initial market reaction.
The Reserve Bank of Australia (RBA) announced on Tuesday that it hiked the Official Cash Rate (OCR) by 25 basis points (bps) to 4.10% from 3.85% after concluding its March monetary policy meeting.
The decision aligned with the market expectations.
Summary of the RBA Monetary Policy Statement
Today’s decision was made by majority.
While inflation has fallen substantially since its peak in 2022, it picked up materially in the second half of 2025.
Information since the February meeting suggests that some of the increase in inflation reflects greater capacity pressures.
Five members voted to increase rate by 25bps.
The conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation.
The board judged that there is a material risk that inflation will remain above target for longer than previously anticipated.
Four members voted to leave the cash rate target unchanged at 3.85 per cent.
Short-term measures of inflation expectations have already risen.
Board judged that inflation is likely to remain above target for some time and that the risks have tilted further to the upside.
A wide range of data over recent months have confirmed that inflationary pressures picked up materially in the second half of 2025.
The conflict in the Middle East poses substantial risks in both directions.
Developments in the Middle East remain highly uncertain, but under a wide range of possible scenarios could add to global and domestic inflation.
Financial conditions have tightened a little this year, but the extent to which monetary policy is restrictive is uncertain.
AUD/USD reaction to the RBA interest rate decision
The Australian Dollar meets fresh supply in an immediate reaction to the RBA’s decision. The AUD/USD pair drops back to test 0.7050, as of writing, down 0.17% on the day.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.06% | 0.13% | -0.01% | -0.08% | 0.22% | 0.05% | |
| EUR | -0.06% | 0.00% | 0.07% | -0.07% | -0.14% | 0.17% | -0.01% | |
| GBP | -0.06% | -0.01% | 0.08% | -0.08% | -0.14% | 0.16% | -0.01% | |
| JPY | -0.13% | -0.07% | -0.08% | -0.13% | -0.20% | 0.10% | -0.07% | |
| CAD | 0.01% | 0.07% | 0.08% | 0.13% | -0.07% | 0.23% | 0.07% | |
| AUD | 0.08% | 0.14% | 0.14% | 0.20% | 0.07% | 0.31% | 0.13% | |
| NZD | -0.22% | -0.17% | -0.16% | -0.10% | -0.23% | -0.31% | -0.17% | |
| CHF | -0.05% | 0.00% | 0.01% | 0.07% | -0.07% | -0.13% | 0.17% |
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).
This section below was published at 00:30 GMT as a preview of the Reserve Bank of Australia’s monetary policy announcements.
- The Reserve Bank of Australia is expected to deliver another 25 bps hike, lifting the interest rate to 4.10% in March.
- Eyes on RBA Governor Bullock’s press conference for cues on the monetary policy path outlook.
- The Australian Dollar is poised for a big reaction to the RBA policy announcements.
The Reserve Bank of Australia (RBA) is set to deliver another 25 basis points (bps) interest rate hike following its March monetary policy meeting on Tuesday, lifting the Official Cash Rate (OCR) to 4.10% from 3.85%.
The decision will be announced on Tuesday at 03:30 GMT, accompanied by the Monetary Policy Statement (MPS). RBA Governor Michele Bullock’s press conference will follow at 04:30 GMT.
The Australian Dollar (AUD) is primed for intense volatility in reaction to the RBA policy announcement and Bullock’s presser.
RBA rate hike is a done deal amid energy-driven inflation risks
As the war in the Middle East continues, central banks globally face a tough call over whether to look through the energy-driven inflation shock or push back against it and risk derailing the economic recovery.
However, the RBA seems well-positioned to counter looming inflation risks by raising the OCR as the economy remains on a solid footing.
Data from the Australian Bureau of Statistics (ABS) showed the Gross Domestic Product (GDP) rose 0.8% in the fourth quarter of 2025, above an upwardly revised 0.5% in the previous quarter and the market consensus of 0.6%. Annual growth accelerated to 2.6%, the fastest pace since early 2023.
Meanwhile, the monthly Consumer Price Index (CPI) rose 0.4% in January, beating estimates of a 0.3% increase. Moreover, the annual inflation reading held at a firm 3.8%, above forecasts for a deceleration to 3.7%.
During a speech at the AFR Business Summit in Sydney on March 2, Governor Michele Bullock said that the Board was uncertain if financial conditions were sufficiently restrictive to return inflation to the midpoint of the target in a reasonable timeframe, highlighting that developments in the Middle East serve as a reminder of persistent geopolitical uncertainty, and warning that a prolonged shock could add to inflation pressures
Last week, RBA Deputy Governor Andrew Hauser warned that Oil price shocks pose upside risks to inflation amid uncertainty tied to the Iran conflict.
“Volatility in Oil prices and tensions in the Middle East pose a genuine challenge for us [the central bank].” However, “The Australian economy in many ways is in good shape,” he said.
Against this backdrop, ANZ, Westpac, Deutsche, Citi and the National Australia Bank (NAB) revised their call, projecting a rate hike this week.
How will the Reserve Bank of Australia’s decision impact AUD/USD?
The AUD is finding its feet against the US Dollar (USD) as it braces for the RBA showdown.
AUD/USD could stage a solid recovery if the RBA’s MPS and Governor Bullock’s words suggest that rate hikes are here to stay.
On the other hand, the Aussie pair could continue to face bearish pressure if Bullock warrants caution on future rate hikes and delivers a wait-and-see guidance.
Dhwani Mehta, Asian Session Lead Analyst at FXStreet, highlights key technical levels for trading AUD/USD following the policy announcement.
“The major has slipped under the 21-day Simple Moving Average (SMA) near 0.7070, signaling a loss of short-term upside momentum. The 14-day Relative Strength Index (RSI) has retreated toward the mid-40s, indicating fading bullish pressure and reinforcing the corrective tone after the pair failed to sustain gains above 0.7100.”
“Immediate resistance emerges at the 21-day SMA around 0.7070, followed by the 0.7120 area, which limited the pair in February, acting as the next barrier, and 0.7150 capping the topside beyond there. On the downside, initial support is at 0.6980, which supported the sharp decline on Friday, guarding a deeper pullback toward 0.6960, where the 50-day SMA currently rises. A break below that zone would expose the 100-day SMA around 0.6770,” Dhwani adds.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
