RBA raises cash rate by 25 bps to 4.60%, highest since 2011

  • Cash rate decision 4.60%
  • Prior decision 4.35%
  • Today’s policy decision was unanimous
  • Since the previous meeting, some of the upside risks to inflation are materialising
  • There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation
  • RBA remains focused on ensuring that high inflation does not become embedded
  • Inflation is still too high; some of the upside risks flagged in August are materialising
  • A further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period
  • Will continue to do what is necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed
  • Will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions
  • Full statement

Coming into the decision, markets had fully priced in a 25 bps rate hike with roughly 43% odds of another move in November next. More to come..

This article was written by Justin Low at investinglive.com.

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