RBA Cash Rate Hits 4.6% as Inflation Concerns Mount

The Reserve Bank of Australia (RBA) has raised its cash rate target by 25 basis points to 4.6 per cent, marking its fourth rate hike this year.

This decision reverses last year's cutting cycle and takes the benchmark rate to its highest level since late 2011.

The RBA pointed to a broadening conflict in the Middle East as a reason for higher global energy prices, which have partly flowed through to other goods and services, leading to rising cost pressures and inflation.

The Board said that aggregate demand growth needs to remain subdued for a period to ease capacity pressures and bring inflation back to target.

RBA Governor Matthew Bell stated that the three earlier rate increases this year have tightened financial conditions, and the economy appears to be slowing, but inflation is still too high.