Reserve Bank of Australia raises interest rates

The Reserve Bank of Australia (RBA) increased its policy rate 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 2.85 percent to 3.10 percent. The RBA has increased interest rates by a total of 300 basis points in its last 8 meetings. The RBA reiterated that its priority is to re-establish low inflation and reduce it to the 2-3 percent range. The Board indicated that it expects to increase interest rates further in the coming period, but that this will not follow a predetermined path. The statement said, "The Board is closely monitoring the global economy, household spending, wage and price-setting behavior. The size and timing of future rate hikes 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 achieving inflation target and will do what is necessary to achieve this." The RBA expects growth of around 1.5 percent in 2023 and 2024.