RBA Boosts Cash Rate to 4.60% as Inflation Concerns Mount

The Reserve Bank of Australia (RBA) has increased the official cash rate by 0.25% to 4.60%, a 15-year high, in an effort to combat elevated inflation and capacity pressures in the economy.

According to the RBA's media release, inflation remains a concern due to factors such as the conflict in the Middle East and higher global energy prices, which have partially been passed through to other goods and services.

The RBA emphasized that growth in aggregate demand needs to remain subdued for a period to reduce capacity pressures and bring inflation back to target.

Mortgage holders across most jurisdictions will face an increase of more than $100 a month in their mortgage repayments, with Sydneysiders being the most affected, according to realestate.com.au Senior Economist Eleanor Creagh.

Financial markets predict that the RBA may lift the OCR another one to two times, which would see mortgage repayments reach levels seen in the late-1980s and early 1990s when mortgage rates hit 17%.