Australia raises interest rates by 25 basis points to 12-year high

By Gokhan Ergocun

ISTANBUL (AA) – The Reserve Bank of Australia decided on Tuesday to hike its policy interest rate, also known as the cash rate, by 25 basis points to 4.35%.

The rate reached its highest level since Nov. 2011.

The bank also increased the interest rate paid on exchange settlement balances by 25 basis points to 4.25%.

It noted that the country has passed the peak level of annual inflation, but the rates are still high, adding: "The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly."

Inflation is now expected to be 3.5% by the end of 2024 and 2-3% by the end of 2025, the bank said.