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RBA raises cash rate target by 25 bps to 4.60%

The RBA cited elevated inflation, higher global energy prices tied to the Middle East conflict, and cost pressures pushing firms to raise or consider raising prices.

Reported · Written up by our desk · Central Banks

Action Forex reports that the Reserve Bank board decided to increase the cash rate target by 25 basis points to 4.60 percent at its meeting today.

In its statement, the RBA said inflation remains elevated and that upside risks flagged in August are materialising, including broader effects from the Middle East conflict that have lifted global energy prices above what was assumed in August forecasts.

The central bank also pointed to rapid growth in global prices for technology-related goods driven by AI-related demand, alongside pressure on domestic capacity and cost pressures reported by firms.

On the outlook, the RBA said short term measures of inflation expectations remain elevated, recent inflation outcomes in Australia were stronger than expected at the previous meeting, output growth has slowed but was stronger than expected in the June quarter, and signs show consumer spending easing gradually.

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