The Reserve Bank of Australia is raising interest rates by 50 basis points, bringing the hike to 125 basis points since May, in the fastest series of moves since 1994.
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Australia’s central bank raises interest rates by 1.35%
Australia’s central bank on Tuesday raised interest rates for a third consecutive month, and announced further increases in the future, as it struggled to contain rising inflation even at the risk of causing economic deflation.
At the conclusion of its July policy meeting, the Reserve Bank of Australia raised its benchmark interest rate by 50 basis points to 1.35%, bringing the size of the hike to 125 basis points since May, in the fastest series of moves since 1994.
“The board expects to take further steps in the process of normalizing monetary conditions in Australia in the coming months,” Reserve Bank of Australia Governor Philip Lowe said in a statement.
The rally was widely expected in the markets, and the Australian dollar eased slightly in reaction to the decision, reaching $0.6863.
Official data on consumer price inflation for the second quarter is due later this month and is expected to show another worrying rise to 6% or more, levels not seen since the sales tax was introduced in 2000.
Core inflation is also likely to accelerate past 4%, moving away from the RBA’s target range of 2-3%.