The Reserve Bank of Australia raised its policy interest rate by 25 basis points to 3.85% on Tuesday, its first rate increase since November 2023 amid rising inflation.

The Reserve Bank of Australia’s move was in line with expectations of economists polled by Reuters and came as data showed inflation had reached its highest level. highest level Six quarters.

“Private demand is growing faster than expected, pressure on production capacity is greater than previously assessed, and labor market conditions are somewhat tight,” the central bank statement said, noting that inflationary pressures rose “significantly” in the second half of last year.

Senior RBA officials have repeatedly rejected expectations of rate cuts. Earlier this year, Reserve Bank of Australia deputy governor Andrew Houser said the chances of a near-term interest rate cut were “probably very low” as inflation remained high. The central bank’s inflation target is 2.5%

After the central bank’s interest rate decision on December 9, Governor Michele Bullock echoed this stance, saying that the rate cut not on the horizon in the foreseeable future.

Asked whether the bank would consider further rate increases, Bullock said the bank would evaluate economic data on a “meeting-by-meeting” basis.

“If inflation persists and does not appear to be falling back toward the Committee’s objective … the Committee may have to consider whether it is appropriate to leave rates unchanged or, indeed, to raise them at some point,” she said.

australian economy up 2.1% Growth in the third quarter rose from a revised 2% in the previous quarter, marking the fastest expansion in about two years.