At their monetary policy meeting on August 2, the board members of the Reserve Bank of Australia (RBA) have decided to increase the official cash rate (OCR) by 50 basis points, from 1.35% to 1.85%.
The central bank has said the rise was one more step in the “normalization” of monetary policy, abandoning the previous reference of the removal of “extraordinary” stimuli in its monetary policy report.
According to 32 of 34 economists polled by Reuters between July 22 and 28, the RBA was expected to raise the cash rate by 50 basis points to 1.85% at its meeting on August 2.
On the RBA rate decision
The Bank of Australia announces the interbank interest rate. This rate affects a range of interest rates set by commercial banks, building societies and other institutions for their own borrowers and depositors. It also affects exchange rates. If the Bank of Australia is firm on the inflationary outlook for the economy and raises rates, this is bullish for the Australian dollar, while a reduced outlook for inflationary pressures will be bearish.
Source: Fx Street
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