Australia raises rates for first time since late 2023 as inflation hits six-quarter high
Reserve Bank of Australia (RBA) governor Michele Bullock speaks at a press conference at the bank’s head office in Sydney, Australia, on Tuesday, April 1, 2025.
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Australia’s central bank on Tuesday raised its policy rate by 25 basis points to 3.85%, marking the Reserve Bank of Australia’s first rate hike since November 2023 as inflation continues to climb.
The Reserve Bank of Australia’s move met expectations of economists polled by Reuters and followed data showing inflation was at its highest level in six quarters.
Senior RBA officials have repeatedly pushed back against interest rate cut expectations. Earlier this year, Reserve Bank of Australia Deputy Governor Andrew Hauser said the likelihood of a rate cut in the near term was “probably very low”, citing persistently high inflation. The central bank’s inflation target is 2.5 percent
Governor Michele Bullock reiterated this stance, saying that interest rates would be reduced after the bank’s interest rate decision on December 9. we were not on the horizon for the foreseeable future.
Asked at the time whether the bank would consider further increases, Bullock said the bank would evaluate economic data “on a meeting-by-meeting basis.”
“If inflation remains persistent and appears unlikely to move back toward the Board’s target…the Board may have to consider whether it is appropriate to keep interest rates where they are or raise them at some point,” he said.
Australia’s economy grew by 2.1% in the third quarter, down from a revised 2% in the previous quarter, the fastest pace of growth in nearly two years.
