RBA Set to Hike Interest Rates Amid Expectations of Further Increases

The Reserve Bank of Australia is set to announce its latest policy decision on Tuesday, with expectations pointing towards a 25 basis point interest rate hike to 4.60%. The move has been largely priced in by markets, which anticipate two to three more hikes over the coming year.

Danske Bank notes that the current policy rate is already at a relatively high level, suggesting that the RBA may ultimately deliver less than the expected rate increases.

The upcoming announcement comes on the heels of solid Q2 GDP reports and July CPI inflation figures. Neil Wilson, UK investor strategist at Saxo Markets, believes that these numbers argue for a clear case for the central bank to raise rates.