Australia’s apex lender ups rates

The Reserve Bank of Australia announced on Tuesday that it has raised its benchmark interest rate for the 12th consecutive time to 4.1%. This decision comes in response to a higher-than-anticipated annual inflation rate of 6.8% reported for the first quarter of the year. The central bank warned that additional rate hikes could be on the horizon.

Governor Philip Lowe of the Reserve Bank of Australia stated that it will take time for inflation to decrease and reach the target range of 2% to 3%. The recent interest rate increase is intended to instill confidence that inflation will eventually return to the target range within a reasonable timeframe. This move reflects the bank’s commitment to maintaining price stability.

With this latest adjustment, the cash rate has reached its highest level since April 2012. The Reserve Bank initiated its series of interest rate hikes in June 2022. Lowe emphasized that the board will closely monitor global economic developments, household spending patterns, and the inflation and labor market outlook in determining whether further increases are necessary.

As the Reserve Bank of Australia continues its efforts to manage inflation and stabilise the economy, the decision to raise interest rates is aimed at maintaining a healthy balance and supporting the target inflation range.