The Reserve Bank of Australia on Tuesday raised its interest rate for the first time in more than a decade by 25 basis points to 0.35% amid acceleration of inflation as prices of food, petrol and other consumer goods all spiked in the first quarter of 2022. The hike was Australia’s first raise since November 2010.
Philip Lowe, governor of Australia’s central bank, said that it is the right time to pull back some of the extraordinary monetary support that was placed to help the economy during the Covid-19 pandemic.
“The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected,” Lowe said in a statement. “There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.”
