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Australia Lifts Rates to 4.35 Percent as Inflation Surges
(MENAFN) Australia's central bank moved to tighten monetary policy on Tuesday, lifting its benchmark interest rate by 25 basis points to 4.35 percent as resurgent inflation threatens to entrench above official targets.
The Reserve Bank of Australia (RBA) confirmed that its Monetary Policy Board voted overwhelmingly in favor of raising the cash rate target from 4.10 percent to 4.35 percent at Tuesday's meeting, with eight members backing the move and just one dissenting in favor of holding rates steady.
Officials pointed to a marked acceleration in price pressures since late 2025, attributing the renewed inflationary surge in part to capacity constraints and climbing fuel and commodity costs tied to ongoing conflict in the Middle East.
The RBA has sharply revised its inflation outlook upward, now projecting headline inflation to crest at 4.8 percent by June, while trimmed mean inflation is forecast to reach 3.8 percent over the year to the same month — both figures exceeding earlier projections.
In its formal decision statement, the board warned that price pressures were unlikely to ease quickly, noting that "inflation was likely to remain above target for some time and that the risks remain tilted to the upside, making it appropriate to increase the cash rate target."
The rate decision underscores the RBA's continued resolve to restore price stability even as higher borrowing costs weigh on households and businesses across the country.
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