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RBA back to lifting rates

The Reserve Bank of Australia has surprised punters by increasing the cash rate target by 25 basis points to 3.85% at this month’s Monetary Policy Meeting, saying inflation of 7% is still too high. 

Rates were paused last month at 3.6% following a record run of ten consecutive rises, and economists widely predicted a second, but RBA governor, Philip Lowe says the Board’s priority remains to return inflation to target of 3% around mid-2025. 

The result follows a scathing Reserve Bank Review by the Australian Government, recommending a board with greater economic expertise, and move to just eight meetings a year. 

The central bank also increased the rate paid on Exchange Settlement balances by 25 basis points to 3.75%.