RBA Hikes Cash Rate Amid Elevated Inflation Concerns
The Reserve Bank of Australia (RBA) raised its official cash rate by 25 basis points to 4.60 per cent at its latest monetary policy board meeting, citing 'stubbornly sticky' inflation and heightened concerns over economic growth.
In a unanimous decision, the RBA confirmed that the central bank kept rates unchanged in August as part of its 'wait-and-see' approach but would respond when further upside risks to inflation emerge, which they now have. The statement from RBA Governor Michele Bullock and the Board noted that trimmed mean inflation remains stuck at 3.6 per cent.
The hike was necessary due to above-forecast GDP growth, a move to tighten financial conditions, and to bring inflation back to target in a reasonable period. Inflation is still too high, and the RBA judged that further tightening in financial conditions is warranted. The Board will continue to do what it considers necessary to bring inflation sustainably back to target.