Global Finance News
11 Aug 2026, 05:13
ASX 200 Rises 0.4% as RBA Holds Interest Rates at 4.35%
Australian stocks moved higher Tuesday after the Reserve Bank of Australia left its benchmark cash rate unchanged, while business confidence remained weak.
The S&P/ASX 200 was up about 0.44% at 9,273.5, gaining 40.9 points during the session. The index strengthened following the RBA announcement and moved toward the 9,280 level.
RBA Keeps Cash Rate at 4.35%
The RBA left its cash rate unchanged at 4.35% at its August meeting, matching market expectations. The decision follows three 25-basis-point increases earlier in 2026, including the most recent hike in May. Official RBA data confirm the cash rate will remain at 4.35% following the August decision.
The decision provided some relief to equities because another increase would have added further pressure on borrowing costs and interest-rate-sensitive sectors. However, the central bank continues to face persistent underlying inflation, meaning the possibility of additional tightening has not disappeared.
Business Confidence Remains Weak
Meanwhile, NAB Business Confidence came in at -6 in July, unchanged from the previous reading. The negative figure indicates businesses remain cautious about the economic outlook.
The weak confidence reading contrasts with the relatively resilient equity market and reinforces the challenge facing the RBA: containing inflation while avoiding excessive damage to business activity and employment.
The ASX 200's positive reaction suggests investors are focusing primarily on the absence of another rate increase. Australian shares had already been trading modestly higher ahead of the decision, with the index gaining around 0.3% earlier in the session.
With the cash rate remaining at 4.35%, attention now shifts to upcoming inflation, employment and consumer data for clues on whether the RBA can maintain its current policy stance or will need to resume tightening later in 2026.
Australian stocks moved higher Tuesday after the Reserve Bank of Australia left its benchmark cash rate unchanged, while business confidence remained weak.
The S&P/ASX 200 was up about 0.44% at 9,273.5, gaining 40.9 points during the session. The index strengthened following the RBA announcement and moved toward the 9,280 level.
RBA Keeps Cash Rate at 4.35%
The RBA left its cash rate unchanged at 4.35% at its August meeting, matching market expectations. The decision follows three 25-basis-point increases earlier in 2026, including the most recent hike in May. Official RBA data confirm the cash rate will remain at 4.35% following the August decision.
The decision provided some relief to equities because another increase would have added further pressure on borrowing costs and interest-rate-sensitive sectors. However, the central bank continues to face persistent underlying inflation, meaning the possibility of additional tightening has not disappeared.
Business Confidence Remains Weak
Meanwhile, NAB Business Confidence came in at -6 in July, unchanged from the previous reading. The negative figure indicates businesses remain cautious about the economic outlook.
The weak confidence reading contrasts with the relatively resilient equity market and reinforces the challenge facing the RBA: containing inflation while avoiding excessive damage to business activity and employment.
The ASX 200's positive reaction suggests investors are focusing primarily on the absence of another rate increase. Australian shares had already been trading modestly higher ahead of the decision, with the index gaining around 0.3% earlier in the session.
With the cash rate remaining at 4.35%, attention now shifts to upcoming inflation, employment and consumer data for clues on whether the RBA can maintain its current policy stance or will need to resume tightening later in 2026.
