RBA hikes for first time in over 10 years
Philip Lowe says RBA will also allow the balance sheet to shrink, as inflation rises more than expected
The Reserve Bank of Australia raised its main interest rate by 25 basis points today (May 3), its first rate hike in more than 10 years.
In a statement announcing the decision, governor Philip Lowe said inflation had risen by more than expected, hitting 5.1% in March. Although he said “global factors” were the main driver, he added that the domestic economy is increasingly facing “capacity constraints”, which are causing inflationary pressures to broaden.
“Firms in a range of industries are
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