Australia's central bank raises rates 25bps to 4.35%

SYDNEY: Australia’s central bank raised its main cash rate for a third straight month on Tuesday as it battled to control a spike in inflation, and said it was now well placed to respond to the economic fallout from the conflict in the Middle East.

Wrapping up its May policy meeting, the Reserve Bank of Australia (RBA) hiked rates by 25 basis points to 4.35%, matching the peak hit during the inflationary fallout from the pandemic.

The board voted 8 to 1 for the increase, a change from March when it split 5-4.

Markets had leaned toward a hike as a spike in global energy costs pushed up headline consumer prices and threatened to feed into inflation expectations.