The Bank of Australia raised interest rates more than expected, taking decisive action to slow down the deteriorating outlook for inflation, and warned that further tightening would follow.
The official interest rate increased to 0.85% from 0.35%. The increase follows the previous one in May, which was the Reserve Bank of Australia’s first in a decade.
Most economists expected interest rates to rise by 25 basis points.
“The increase is a further step towards withdrawing the emergency monetary support that went into effect to help the Australian economy during the pandemic,” said central bank governor Philip Lowe.
“The board is expected to take further steps in the process of normalizing monetary conditions in Australia in the coming months. The size and timing of future interest rate hikes will be guided by the data being announced,” he added.
Rising inflation in the first quarter prompted interest rate hikes to begin in May, with economists expecting the situation to worsen further in the coming months as rising commodity prices, rising fuel and electricity costs and rising rents, led to higher living costs.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
