Australia’s central bank raised its benchmark rate by a quarter-point to bring inflation back to the target range.
The policy board of the RBA, headed by Governor Philip Lowe, decided to lift the cash rate target by 25 basis points to 2.60 percent from 2.35 percent. This was the highest rate since mid-2013.
However, the pace of rate hike was slower than the expected 50 basis point increase.
The board also increased the interest rate on exchange settlement balances by 25 basis points to 2.50 percent.
The board expects to increase interest rates further over the period ahead. The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labor market, the bank said.
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