Australia Raises Benchmark Rate to 4.85%, Highest in 18 Years
Summary
- Australia's central bank said it raised its benchmark interest rate from 4.60% to 4.85%, the highest level in 18 years.
- The benchmark rate increase was the fifth move this year, driven by persistent inflation pressure and rising energy prices.
- The RBA said inflation would not return to its 2% to 3% target range until the end of 2027, and that any additional rate increases will depend on economic data and the inflation outlook.
Forecast Trend Report by Period
The Reserve Bank of Australia raised its benchmark interest rate to the highest level in 18 years.
Reuters reported on November 3 that the RBA lifted its cash rate by 25 basis points to 4.85% from 4.60% at its monetary policy meeting that day. It was the highest level since the 2008 global financial crisis and the fifth rate increase this year.
Six of the central bank's nine monetary policy board members backed the decision, while the other three favored holding rates steady.
Persistent inflation pressures were the main driver behind the increase. The RBA cited higher energy prices linked to the Middle East conflict and domestic price pressures, and said inflation would not return to its 2% to 3% target range until the end of 2027.
Still, the outlook for further rate increases remains unclear. The RBA said future policy decisions will depend on economic data and the inflation outlook.
Uk Jin
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