The Reserve Bank of Australia (RBA) raised its key interest rate by 0.50% to 1.85%, the highest level in six years, signaling that it may raise rates in the future.
The RBA issued a statement after the meeting saying that today’s rate hike is an ongoing process to normalize monetary policy. And it is the priority task that the RBA has taken on to bring inflation numbers down to a 2-3% range.
The Australian Bureau of Statistics (ABS) reports that Australian inflation is now at 6.1% year-on-year, the highest level since December 1990.
Factors such as the sluggish global economy and the floods on Australia’s east coast all contributed to the sharp rise in demand-side inflation.