The Central Bank of Australia (RBA) decided to raise the benchmark interest rate by 0.5 percentage point, from 0.35% to 0.85%, at its monetary policy meeting on Tuesday (7). ).
Also according to the RBA, further increases are likely in the coming months, in a search for monetary normalization.
In the last interest rate hike, the monetary authority had raised the rate by 25 basis points, from 0.10% to 0.35%.
The size and timing of future interest rate hikes will be guided by data received and the Board’s assessment of the outlook for inflation and the labor market, RBA President Philip Low said in a statement.
The monetary authority assesses that inflation has increased significantly in the country and should rise even more. The central bank expects inflation to fall back to the target range in 2023, at between 2 and 3%.
“Today’s interest rate hike is another step in withdrawing the extraordinary monetary support that was put in place to help the Australian economy during the pandemic,” Low said.
“Higher electricity and gas prices and recent increases in gasoline prices mean that, in the short term, inflation is expected to be higher than expected a month ago,” the RBA president said.
“As global supply side issues are resolved and commodity prices stabilize, even at a high level, inflation is expected to moderate. Today’s rise in interest rates will help return inflation to target over time.”
Source: CNN Brasil

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