Australia's Central Bank Raises Interest Rates to 12-Year High at 4.35%, Future Hikes Uncertain
Influence of increased inflation rates for the September quarter and a commitment to bring inflation within a target range has the Reserve Bank governor not ruling out additional possible future rate changes.
- Australia's central bank, the Reserve Bank of Australia (RBA), raised its benchmark interest rate by a quarter percentage point to 4.35%, the first time in five months and the highest rate in 12 years.
- This recent adjustment is the 13th consecutive increase since May 2022 and was anticipated due to the higher than expected inflation rates recorded for the September quarter at 1.2% or 5.4% for the year, primarily driven by gasoline prices.
- The central bank's goal is to keep inflation within a target band of between 2% and 3%. Still, RBA Governor Michele Bullock announced that the board did not expect inflation to arrive at that range until late 2025, signaling the possibility of further rate increases.
- Treasurer Jim Chalmers did not offer any insight on whether the bank would raise rates at its next monthly board meeting on December 5, but stated that the government's policies were instrumental in containing inflation while also providing cost-of-living assistance to the most vulnerable.
- The RBA's approach in raising the rates stands out among the central banks in developed nations, where signs are pointing towards peaking rates in countries like the United States, Canada, and Europe.
Associated Press 
Reuters 
