RBA Interest Rate Rise
Reserve Bank increases official cash rate to 3.85% in shock decision
Interest rates are moving upwards again after the Reserve Bank of Australia (RBA) voted to lift the cash rate a further 25 points to 3.85 per cent at its May board meeting.
Many onlookers were dismayed at the decision not to repeat last month’s hold at 3.6 per cent
The lift in the cash rate comes after the RBA held it steady last month – the first pause in 11 months following 10 consecutive rises. Most experts had forecasted that the pause would continue, and the 25-point hike caught many by surprise.
In a statement, RBA Governor Philip Lowe said that while inflation in Australia has passed its peak, 7% is still too high and it will be some time yet before it is back in the target range.
“Given the importance of returning inflation to target within a reasonable timeframe, the board judged that a further increase in interest rates was warranted.”
Adding to the bitter blow, the RBA boss has warned inflation is still too high – and more hikes could be needed.
*read more here
https://www.rba.gov.au/media-releases/2023/mr-23-10.html
