RBA Hikes Rates Amid Inflation Fight
The Reserve Bank of Australia (RBA) has raised interest rates to combat high inflation, despite unusual economic conditions. The RBA's benchmark cash rate is now at a 15-year high after a fourth hike in eight months.
RBA Governor Michele Bullock acknowledged that the decision is difficult for households with mortgages and businesses with loans, but emphasized that high inflation hurts all Australians, especially the most vulnerable.
The RBA's fight against inflation has been made more challenging by global energy price increases due to the Middle East conflict. The conflict, which began in February, has had a significant impact on Australia's economy.
Bullock labelled the Middle East conflict 'a big shock' that has 'made us all poorer in this country.' However, she also noted that complex constraints on domestic capacity are contributing to Australia's inflation problem.