Financial News: Australia Hikes Key Policy Rate By 25 Bps

Australia Hikes Key Policy Rate By 25 Bps

05/05/2026 - 00:50:00 (RTTNews)

(RTTNews) - The Reserve Bank of Australia raised its key interest rate by a quarter-point on Thursday as risks to inflation remain tilted to the upside.

The policy board, governed by Michele Bullock, decided to lift the cash rate target by 25 basis points to 4.35 percent.

This decision followed similar quarter-point increases in February and March. At the meeting, eight board members voted in favor of the hike, while one member voted to maintain the rate at 4.10 percent.

".the Board assessed that inflation is likely to remain above target for some time and that the risks remain tilted to the upside, including to inflation expectations," the bank said in a statement. "It was therefore judged appropriate to increase the cash rate target," the bank said.

The board observed that higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly.

This is in addition to the high inflation seen around at the start of the year, reflecting capacity pressures in the economy, the board noted.

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