Australia Raises Interest Rates to 18‑Year Peak to Tame Inflation
Australia's Reserve Bank hikes its cash rate to 4.85%, an 18‑year high, aiming to curb inflation while projecting a 5.1% unemployment rate by 2028.
POLICY WIRE — Canberra, Australia — The Reserve Bank of Australia lifted its cash rate to 4.85%, the highest level in 18 years, in a decision that matched economists’ expectations and marked the bank’s fifth hike of the year.
The rate rise follows a tightening cycle aimed at cooling inflation, which the central bank now acknowledges will take longer to reduce than previously forecasted.
The bank also warned that unemployment is likely to climb, projecting a 5.1% rate by the end of 2028, up from the 4.7% level it currently sits at, the highest in five years.
A 6‑3 split among the Monetary Policy Board revealed a near‑unanimous view that further tightening could be imminent, though some members voiced caution.
“Bullock doesn’t see ‘economy cracking at this point’ – as it happened” was highlighted in the meeting, underscoring confidence in the economy’s resilience amid the tightening cycle.
Reporting by Policy-Wire (PW)
