The Reserve Bank of Australia unexpectedly raised its key interest rate for a second policy session in a row as policymakers assessed inflation as high and considered the risk of high inflationary expectations feeding into wage increases and prices.
The central bank also signaled that more tightening may be required in the future to bring inflation back to the target of 2-3 percent.
The RBA Board, led by Governor Philip Lowe, raised the cash rate target by 25 basis points to 4.10 percent. Economists had expected the bank to leave the rate unchanged.
The key interest rate is now at its highest level since early 2012.
The central bank also increased the interest rate paid on exchange settlement balances by 25 basis points to 4.00 percent.
by Jyotsna V
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