The Reserve Bank of Australia (RBA) has kept its key interest rate unchanged at 3.6 percent, a decision widely expected by economists as policymakers weigh inflation trends and global risks.

At its board meeting on Tuesday, the RBA unanimously voted to hold rates steady, following three consecutive 0.25 percentage point cuts earlier in 2025. The rate has been lowered from 4.35 percent at the start of the year to its current level.

In its monetary policy statement, the central bank noted that inflation remained within the 2–3 percent target range in the second quarter of 2025, but warned that third-quarter inflation could come in higher than forecast. The board also pointed to “uncertainties” in domestic demand and global conditions, citing trade tensions and geopolitical risks as ongoing threats to growth.

“Uncertainty in the global economy remains elevated. There is a little more clarity on the scope and scale of U.S. tariffs and policy responses in other countries, suggesting that more extreme outcomes are likely to be avoided,” the statement said.

The RBA’s next policy review is scheduled for early November.

Meanwhile, the Australian government reported a final budget deficit of about 18 billion Australian dollars (USD 11.8 billion) for the 2024–25 financial year, significantly lower than earlier forecasts. Treasurer Jim Chalmers and Finance Minister Katy Gallagher said the final underlying cash deficit was just under AUD 10 billion, or 0.4 percent of GDP.

They highlighted that since the Labor Party came to power in 2022, budget outcomes have been AUD 209 billion better than projected, marking historic progress in fiscal management.