The Reserve Bank of Australia (RBA) has raised its cash rate by 25 basis points to 4.35%, marking the third consecutive hike and matching the previous cycle high. This decision comes as the RBA responds to the economic fallout from surging oil prices driven by the ongoing Iran conflict, which has disrupted global energy supply chains. RBA Governor Michele Bullock described the current monetary policy stance as 'a bit restrictive' and warned that 'Australians are poorer because of this shock to oil prices,' emphasizing the negative impact on growth, employment, and inflation. The RBA's updated economic projections are based on the assumption that the Iran war will end soon and the Strait of Hormuz will reopen, providing some hope for future stabilization. However, the Board intends to pause and assess the unfolding impacts before making further moves [3].
In contrast, the National Bank of Poland (NBP) is expected to keep its policy rates unchanged at 3.75% in the coming months, despite higher April CPI inflation at 3.2% year-on-year and stronger-than-expected March activity data. ING economists Rafal Benecki and Adam Antoniak note that the NBP is adopting a progressively more hawkish communication stance, with July’s updated projections flagged as a potential turning point for reassessing inflation and the medium-term monetary policy path. The Monetary Policy Council (MPC) is likely to emphasize upside inflation risks and signal readiness to tighten policy if inflation pressures broaden, but remains reluctant to respond immediately to supply-driven shocks, particularly given the limited effectiveness of rate hikes against higher energy prices [1].
Similarly, the Swedish Riksbank is expected to leave its policy rate unchanged at 1.75%, maintaining a cautious hawkish bias. Commerzbank's Antje Praefcke highlights that the Riksbank will reiterate its readiness to hike if necessary, especially as Sweden’s growth outlook is pressured by the Iran conflict and energy shock, though inflation remains below target. The Riksbank previously signaled that rates would remain unchanged until the end of the year, and while markets are pricing in a hike in the second half of 2026, Commerzbank considers this expectation too ambitious. The central bank is likely to keep its stance neutral for the Swedish Krona (SEK), emphasizing flexibility in response to evolving scenarios related to the Iran war [2].
Across these central banks, the common thread is the significant influence of the Iran conflict and resulting oil price shock on monetary policy decisions. While the RBA has opted for immediate tightening, both the NBP and Riksbank are holding rates steady but signaling increased vigilance and a readiness to act if inflation risks intensify.
CONCLUSION
The RBA's rate hike underscores the acute impact of the Iran-driven oil shock on Australia, prompting a more restrictive policy stance. In contrast, the NBP and Riksbank are maintaining current rates but adopting a more hawkish tone, reflecting heightened inflation vigilance. Market participants should monitor further developments in the Iran conflict and energy markets, as these will likely shape future central bank actions.