RBA Raises Cash Rate to 4.85% – Highest Since 2008
The Reserve Bank of Australia has lifted the cash rate by 0.25 percentage points, reaching an 18‑year high.
Wow! On Melbourne Cup day the Reserve Bank of Australia delivered a decisive policy move.
The cash rate was lifted by a quarter‑point to 4.85 %. That level is the highest the RBA has set since 2008.
The board’s decision came by a clear majority: six members voted for the 25‑basis‑point increase, while three preferred to keep the rate at 4.60 %.
According to the RBA’s statement, today’s policy decision was by majority: six members voted to increase the cash rate target by 25 basis points to 4.85 percent; three members voted to leave the cash rate target unchanged at 4.60 percent.
This is the fifth hike the central bank has implemented this year, reflecting its determination to bring inflation back within the target band.
When asked about the broader economic backdrop, Treasury Minister Jim Chalmers explained that the government’s budget settings consider “all of the economic circumstances, whether it be the AI boom, more business investment [and] other economic pressures and developments.” He added that officials are looking across the budget to find “the appropriate level of savings which takes into consideration the risks in our economy in both directions, but particularly to respond to this inflation challenge.”
The RBA’s move underscores the ongoing tension between supporting emerging sectors and curbing price pressures.
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