The Magazine for Asian Investors
The Reserve Bank of Australia (RBA) raised its key interest rate by 0.50% to 2.35% in line with market expectations. This is intended to curb inflation.
It is expected that this prime rate increase will cause Australian commercial banks to increase their lending rates. This would mean that if people borrowed $700,000, they would have to pay about $200 more per month for their monthly loan interest.
The RBA governor signaled that the RBA will continue to raise interest rates as long as inflation in Australia remains above the RBA’s target of 2% to 3%.
The RBA began raising interest rates in May due to rising inflation. Inflation in Australia is expected to rise to 8% by the fourth quarter of this year.