The Australian Central Bank (RBA) raised interest rates at its first monetary policy meeting this year. This is the ninth consecutive increase since the meeting in May last year.
The RBA announced on the 7th (local time) that it will raise the base rate by 0.25 percentage points from 3.1% to 3.35%. Australia raised its key interest rate from 0.1% to 0.35% in May last year and raised it for eight consecutive months until the end of last year. Since then, it has continued to raise interest rates at its first monetary policy meeting this year. The RBA's decision is in line with financial market expectations. In December last year, the RBA considered stopping interest rate hikes. Prices were still high, but they were looking for some stability, and above all, they thought it would be difficult to raise interest rates anymore due to the poor economic situation due to falling housing prices and rising interest burdens.
Financial markets also expected that interest rates could be raised twice more this year, but the pace of raising them will be significantly slower.
However, as the Consumer Price Index (CPI) rose 7.8% year-on-year in the fourth quarter of last year announced last month, the financial market is strongly expected to raise interest rates at the monetary policy meeting and continue to raise interest rates for the time being. In a press conference after the meeting, Governor Low expressed his willingness to raise additional interest rates, saying higher interest rates would be needed to return to the inflation target of 2-3%, and the path to achieving a soft landing is still narrow. [Yonhap News]