Reserve Bank of Australia raises interest rates

The Reserve Bank of Australia (RBA) increased interest rates by 25 basis points, in line with market expectations. In a statement made after the RBA's meeting that started yesterday and ended today, it was stated that the interest rate was increased from 2.60 percent to 2.85 percent. Thus, the policy rate in the country rose to its highest level since 2013. The RBA has increased interest rates by a total of 275 basis points in its last 7 meetings. The RBA stated that the 25 basis point rate increase would help the inflation target, which is in the 2-3 percent range. However, it indicated that further interest rate increases are likely to be needed in the coming period. The bank stated that it will closely monitor the global economy, household spending, wage and price-setting behavior. The statement said, "The size and timing of future interest rate increases will continue to be determined by incoming data and the Board's assessment of the inflation and labor market outlook. The Board remains committed to returning inflation to target and will do what is necessary to achieve this."