RBA Hikes Cash Rate to 15-Year High

The Reserve Bank of Australia (RBA) announced its decision to raise the cash rate for the fourth time this year. The hike brings the rate to 4.6%, its highest level since November 2011.

This move comes after inflation remained above target, and despite a slight drop in the consumer price index (CPI) from August. The CPI measures inflation in the Australian economy and came down to 3.5% in August, but not as much as predicted by the RBA.

RBA Governor Michelle Bullock has stated that tightening monetary policy is necessary due to excess demand in the market. She emphasized that the rate hike may be enough to slow demand and bring inflation back into line with supply, or it may require further action.