The Reserve Bank of Australia (RBA) has raised its cash rate for the fourth time in 2026, lifting borrowing costs to their highest level since November 2011, according to the ABC’s live business blog for Tuesday 29 September. Within hours of the decision, economists quoted by the broadcaster had moved on to the next question: whether a fifth increase arrives before Christmas — with Melbourne Cup Day, 3 November, named as the likeliest date.
That timetable matters in Suva as well as Sydney. Australia is home to the largest Fiji-born community outside Fiji, and is one of the biggest sources of the personal remittances that rank alongside tourism among Fiji’s main earners of foreign exchange. The ABC’s coverage is written for an Australian audience and does not mention Fiji; the Fiji analysis that follows is Fiji News’ own, drawn from published data.
Key facts
The Australian decision
- The cash rate now stands at 4.60 per cent — the fourth rise of 2026 and the highest setting since November 2011, the ABC reported.
- Betashares chief economist David Bassanese said the board’s decision was unanimous, and that the bank explicitly warned it may raise rates again if needed.
- Bassanese’s base case is a further 25 basis points on Melbourne Cup Day, which would take the cash rate to 4.85 per cent.
- The Australian Council of Trade Unions (ACTU) said the rise adds about A$110 a month to repayments on an average mortgage of A$731,000 — and about A$460 a month once this year’s three earlier rises are counted.
- Macquarie Bank will pass the increase on to borrowers in full from 15 October; the big four banks had not announced their decisions when the ABC’s blog closed.
The Fiji comparison
- The Reserve Bank of Fiji‘s Overnight Policy Rate has sat at 0.25 per cent since March 2020, on the RBF’s published monetary policy announcements — the two central banks are pointing in opposite directions.
- The Fiji dollar is not floated. It is pegged to a weighted basket of currencies that includes the Australian dollar, so Australian rate moves transmit into the price Fiji pays for imports.
- RBF balance-of-payments data has recorded annual personal remittance inflows above FJ$1 billion in recent years, with Australia, New Zealand and the United States the dominant source markets.
Why it matters for Fiji
Start with the people. Australian Bureau of Statistics census counts have put the Fiji-born population in Australia above 60,000 for the past decade, concentrated in Sydney, Brisbane and Melbourne — and larger again once Australian-born children of Fijian parents and Fijians on temporary visas are counted. Thousands more Fijians work in Australia on short- and long-term placements under the Australian government’s Pacific Australia Labour Mobility (PALM) scheme, in which Fiji is a participating country. No updated 2026 census figure exists; the next count will revise it.
Those households are the transmission belt. On the ACTU’s own figures, an average Australian mortgage holder is now finding roughly A$460 a month more than in January for the same loan, before higher rents, fuel and groceries. Money that goes to a bank does not go into a remittance app. With remittance inflows running above FJ$1 billion a year and Australia among the largest sources, an Australian cash rate decision is in practice a Fijian household income story. Fiji News has already set out in detail what the move to a 15-year high costs Fijians with Australian mortgages.
There is a currency channel too. Under the exchange rate arrangement published on the RBF’s website, the Fiji dollar is pegged to a basket that includes the Australian dollar alongside the US dollar, the New Zealand dollar, the euro and the yen. Higher Australian interest rates that strengthen the Australian dollar therefore pull on the basket, and on the landed cost of the fuel, food and building materials Fiji imports. That is a mechanical relationship rather than a forecast — the size and direction of the effect in any given month depends on how the other basket currencies move.
Finally, demand. Australia is one of Fiji’s largest visitor-source markets, and holiday travel is discretionary spending of exactly the kind a tightening cycle squeezes. Whether that shows up in arrivals data is an open question; Fiji’s external position has so far looked resilient, with the government reporting record foreign reserves of $3.9 billion this year.
Economists split on how far rates go
Bassanese told the ABC there is a good chance of another rise before Christmas, and that Australia looks set for a period of stagflationary conditions — weak growth alongside stubbornly high inflation, a combination the ABC noted the RBA has previously called its “nightmare” scenario. He said the most concerning development was a rebound in oil prices driven by the ongoing conflict in the Middle East.
The oil leg of that argument has the most direct Fijian read-through. Fiji imports its fuel, and the RBF has repeatedly identified imported energy prices as a key risk in its published inflation commentary. Higher global crude raises costs in Suva and Sydney alike — and, as the economists quoted by the ABC agreed, interest rates cannot touch them.
Richard Holden, chief economist at Chartered Accountants ANZ, put the market view more bluntly: bond markets expect two more rate rises in coming months, with the first possibly on Melbourne Cup Day, 3 November 2026. Interest rates, he said, are the only tool available to the RBA to deal with inflation and Australia’s cost-of-living crisis. Holden also noted that the bank reversed its three 2025 rate cuts earlier this year, leaving Australian monetary policy tighter than it was in December 2024.
Renters, workers and small business
Anglicare: ‘nobody left to pass it to’
Rob Stokes, chief advocacy officer at the charity Anglicare Sydney, said the increase will be felt hardest by people already living on the edge, arguing that an unwelcome consequence of falling property prices is rising rents. Banks pass on rate rises and landlords pass on higher costs, he said, while people on low incomes have nobody left to pass the burden to — a squeeze visible in earlier reporting on Gold Coast rents reaching $900 a week. Stokes cited Anglicare research showing just 1 per cent of Greater Sydney rentals were affordable for people on low incomes.
ACTU: 723,000 already out of work
ACTU secretary Melissa Donnelly said the decision shows the bank has lost sight of its dual mandate and adds to the risk that workers have hours cut or lose jobs altogether. “Working people didn’t cause this inflation, and we can’t be expected to control it,” she said in remarks reported by the ABC. The union body said 723,000 Australians are already out of work, and blamed higher petrol prices on what it called Donald Trump’s Middle East war.
Xero: rate rises won’t touch fuel
Louise Southall, an economist at accounting software firm Xero, said many small business owners face a double squeeze as consumer spending power falls and their own debt repayments potentially rise, because small firms lack the pricing power to pass higher costs to customers. Rate rises tackle domestic demand-driven inflation, she said, but will not touch elevated fuel prices. Fijian-owned businesses in Australian suburbs — remittance agents, freight and unaccompanied-baggage services, catering and labour-hire firms serving the diaspora — sit squarely in that category.
What to watch next
- Tuesday 3 November: the RBA’s Melbourne Cup Day meeting, the date both Bassanese and Holden nominate as the likeliest moment for a fifth 2026 rise.
- Mid-October: whether the big four Australian banks follow Macquarie in passing the increase on in full, which determines the real hit to diaspora repayments.
- Monthly RBF releases: personal remittance inflows and the Overnight Policy Rate decision, published on the bank’s website, will show whether the Australian squeeze is reaching Fijian households.
- Australian visitor arrivals: Fiji Bureau of Statistics tourism releases are the cleanest early read on whether weaker Australian spending is denting Fiji’s biggest export earner.
Sources and method
The account of Tuesday’s decision, and all direct quotes from Bassanese, Holden, Stokes, Donnelly and Southall, come from the ABC’s live business blog for 29 September 2026, linked above. The “highest since November 2011” description rests on the RBA’s published cash rate target series, which shows the previous tightening cycle peaked at 4.35 per cent from November 2023. Fiji-side figures — the Overnight Policy Rate, the currency-basket peg and remittance inflows — are drawn from the Reserve Bank of Fiji’s published monetary policy announcements and balance-of-payments data, and population figures from Australian Bureau of Statistics census counts. Where this article draws a conclusion about Fiji that no source stated, it says so.
Frequently Asked Questions
How does an Australian interest rate rise reach Fiji?
Through three channels, on Fiji News’ reading of the published data. First, Fijians living in Australia with mortgages or rent to pay have less money left to send home, and personal remittances are one of Fiji’s largest sources of foreign exchange. Second, the Reserve Bank of Fiji pegs the Fiji dollar to a basket of currencies that includes the Australian dollar, so any move in the Australian dollar feeds into the rate Fijians pay for imports. Third, weaker Australian household spending affects outbound travel, and Australia is one of Fiji’s biggest tourism markets. The ABC’s coverage of the decision does not discuss Fiji.
What is Fiji’s own policy interest rate?
The Reserve Bank of Fiji’s Overnight Policy Rate has been held at 0.25 per cent since March 2020, according to the RBF’s published monetary policy announcements — an accommodative setting that has not moved with the Australian tightening cycle. The RBF reviews monetary policy monthly and publishes the outcome on its website.
Has any Australian bank already said it will pass the rise on to borrowers?
Yes. The ABC’s live blog reported that Macquarie Bank, Australia’s fifth-biggest bank, will pass the increase on to mortgage borrowers in full, effective 15 October. At the time the blog closed, the ABC said the big four banks had not yet announced their decisions.
Did the RBA signal the increase before it happened?
Richard Holden, chief economist at Chartered Accountants ANZ, told the ABC that the bank’s three most senior figures — Michele Bullock, Andrew Hauser and Sarah Hunter — made a series of hawkish remarks about inflation over the previous three weeks. He said they were clearly at pains to ensure financial markets were not surprised.
Is 4.60 per cent really the highest cash rate since 2011?
Yes, on the RBA’s own published cash rate target series. The target rate was last above 4.50 per cent in late 2011, and the peak of the previous tightening cycle was 4.35 per cent, held from November 2023. A 4.60 per cent setting therefore sits above anything Australian borrowers have faced in roughly 15 years, consistent with the ABC’s description.
What did Anglicare Sydney say about rental affordability?
Rob Stokes, Anglicare Sydney’s chief advocacy officer, cited the charity’s housing research showing only 1 per cent of rentals across Greater Sydney were affordable for people on low incomes, according to the ABC. He urged governments to keep building social and affordable housing.
How many Australians are currently out of work?
The Australian Council of Trade Unions said 723,000 Australians are currently out of work and will face a harder time finding a job after the decision, the ABC reported. The ACTU argued the RBA also risks undoing gains made in secure work since the pandemic.
