RBA hikes interest rates by 25 bps

Reserve Bank of Australia (RBA) hiked interest rates on Tuesday by 3.85 percent, or 25 basis points, to combat the high inflation, and leaving the room for another possible hike.

“While the recent data showed a welcome decline in inflation, the central forecast remains that it takes a couple of years before inflation returns to the top of the target range,” the bank said in a statement.

The inflation is expected to be 4½ percent in 2023 and 3 percent in mid-2025, according to the statement mentioned. The RBA’s main focus is to curb inflation and bring it to the targeted rates.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,” the bank added.