In response to the higher-than-expected rate hike by the Reserve Bank of Australia (RBA) on Tuesday, the Australian Prime Minister Scott Morrisonsaid that the Aussies have been preparing for a rate hike for some time.
His comments come after the RBA hiked the Official Cash Rate (OCR) for the first time in 11 years by 25 basis points to 0.35% versus market expectations for a 15bp rise.
The Prime Minister’s Conservative government is seeking a fourth three-year term in elections on May 21. By raising rates ahead of the election, the RBA has managed to preserve its credibility as an independent institution.
market reaction
The AUD/USD It is currently trading above 0.7115, up 1% on the day, ahead of Governor Phillip Lowe’s press conference at 6.00 GMT.
Source: Fx Street
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