RBA Hikes Cash Rate to 4.60% Amid Inflation Concerns

The Reserve Bank of Australia (RBA) has increased the official cash rate by 25 basis points to 4.60% in a unanimous decision, marking the fourth hike this year and pushing borrowing costs to their highest level since 2011.

The move ends a brief two-meeting pause and sends a clear signal that the Board remains prepared to act further if inflation does not come to heel.

Australian markets initially sold off after the decision, but stabilized by the end of the day, with the ASX 200 up 0.34%.

The RBA's decision was driven by a range of factors, including elevated trimmed mean inflation at 3.6%, well above the 2-3% target band, and recent monthly readings coming in stronger than expected.