RBA raises cash rate to 4.35%
Australian rate-sensitive books must reprice against a 4.35% cash rate
Change
The Reserve Bank of Australia raised the official cash rate by 25 basis points to 4.35% on 5 May 2026.
Why it matters
This is the third consecutive RBA rate hike in 2026. The higher cash rate changes pricing assumptions for rate-sensitive lending, deposits, floating-rate debt and hedging. The RBA signalled further hikes could still be needed.
Implications
- — Bank treasury teams must update rate-sensitive lending and deposit pricing against the 4.35% cash rate — stale rate sheets misprice new and resettable products.
- — Corporate treasury teams with floating-rate Australian dollar debt must recompute debt-service forecasts — old interest assumptions no longer match the cash-rate base.
- — Hedging desks managing Australian dollar rate exposure must refresh hedge valuations — positions priced on the prior cash-rate path carry outdated rate assumptions.
Who is affected
- — Bank treasury teams managing Australian lending and deposit pricing
- — Corporate treasury teams with floating-rate Australian dollar debt
- — Hedging desks managing Australian dollar rate exposure