Australia Central Bank Raises Key Rate By 50 Bps As Expected

(RTTNews) - Australia's central bank hiked its key interest rate by half percentage points, as widely expected, on Tuesday, citing the resilience of the economy and higher inflation.

The policy board of the Reserve Bank of Australia, headed by Governor Philip Lowe, decided to lift the cash rate target by 50 basis points to 1.35 percent from 0.85 percent.

This was the third consecutive rate hike after lifting 50 basis points in June.

The bank also increased the interest rate on Exchange Settlement balances by 50 basis points to 1.25 percent.

The resilience of the economy and the higher inflation mean that this extraordinary support is no longer needed, Lowe said in a statement.

The bank expects to take further steps in the process of normalizing monetary conditions in Australia over the months ahead.

Lowe said the size and timing of future interest rate increases will be guided by the incoming data and the Board's assessment of the outlook for inflation and the labor market.