Central Banks
Australia Raises Key Rate, Signals Further Tightening Ahead
- RBA highlights that rates have risen ‘substantially’ since May
- Sees inflation peaking at 8% this year, lowers growth estimate
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Australia’s central bank raised interest rates by a quarter-percentage point and signaled further tightening to come as it combats escalating inflation.
The Reserve Bank’s board lifted the cash rate to 2.85%, the highest level since April 2013, in a widely expected result. The decision, which underlined the RBA’s pivot away from outsized hikes last month, sent three-year bond yields sliding as much as 15 basis points, while stocks surged 1.7% on the day.