RBA holds cash rate at 3.6%; maintains stability after August cut

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The RBA board voted to hold the cash rate at 3.6% at its September 2025 meeting, keeping rates steady after last month’s quarter-point reduction.

The decision, which was widely anticipated by the market and follows a 25 basis point cut in August, holds borrowing costs at their lowest level since April 2023.

While the RBA noted that inflation remained within its 2–3% target range in the second quarter, officials stressed that a "cautious approach" is still necessary given persistent uncertainties around domestic activity and inflation.

The RBA stated it will be closely tracking domestic demand, labor market trends, and financial conditions. By holding the rate, the RBA buys time to update its outlook, signaling it is prepared to act only if international or domestic developments materially affect the economy.

Separately, the PRIVATE SECTOR CREDIT rose by 0.6% month-over-month in August 2025, matching market expectations but slightly easing from a 0.7% gain in July. Meanwhile, the SEASONALLY ADJUSTED NUMBER OF TOTAL DWELLINGS approved fell by 6% month-on-month to 14,744 units in August, easing from an upwardly revised 10% fall but defying the forecasted 3% growth.

PRIVATE HOUSE APPROVALS IN AUSTRALIA decreased by 2.6% month-over-month to 9,027 units in August 2025, reversing an upwardly revised 1.3% increase in the previous month, preliminary data showed.

The S&P/ASX 200 Index [https://seekingalpha.com/symbol/AS51#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] rose 0.2% to 8,877 on Tuesday, marking its fourth consecutive session of gains and reaching a near two-week high. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] strengthened to around $0.658 on Tuesday, marking its third consecutive session of gains, as the greenback weakened amid growing concerns over a potential government shutdown.

ETFs: (NYSEARCA:EWA [https://seekingalpha.com/symbol/EWA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]), (NYSEARCA:FXA [https://seekingalpha.com/symbol/FXA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]), (NYSEARCA:FLAU [https://seekingalpha.com/symbol/FLAU#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]).

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