Reserve Bank of Australia Raises Cash Rate to 4.6% in 15-Year High

The Reserve Bank of Australia raised its official cash rate by 25 basis points to 4.6% to combat stubborn inflation, reaching its highest level in 15 years.

Key points

• The 25 basis point increase marks the fourth rate hike by the Reserve Bank of Australia this year, bringing the total increase to 100 basis points.
• The board noted that upside risks to inflation have materialized due to broadening Middle East conflict and high global energy prices.
• The central bank left the door open for additional hikes if needed to bring inflation sustainably back to its target band.
• The rate increase adds more than $90 a month to repayments on a typical $600,000 mortgage with 25 years remaining.

Why it matters

This 15-year high in Australian interest rates increases financial pressure on households amidst a housing downturn and slowing economic growth while authorities attempt to curb entrenched inflation.