RBA lifts cash rate to 15
The Reserve Bank of Australia has raised the cash rate to 4.6%, marking a 15-year high as the bank attempts to combat persistent inflation. Officials cited global conflicts and AI-related demand as factors contributing to current economic pressures.
Why it matters
Rising interest rates significantly impact household borrowing capacity and the broader Australian property market.
The Reserve Bank has raised the cash rate for the fourth time this year, squeezing borrowing capacities to the lowest levels seen since the recovery from the Global Financial Crisis.
The conclusion of the RBA monetary policy board’s most recent meeting on Tuesday came with the fresh blow for the beleaguered property market – further interest rate tightening.
The cash rate is now 4.6% and the highest seen in 15 years in Australia, a mammoth milestone amid a challenging 12 months for households plagued by high inflation.
A hike was widely anticipated across the market, with the nation’s big four banks and leading economists forecasting the move following weeks of grim warnings from the RBA.
In a statement accompanying the decision, the monetary policy board said the broadening conflict in the Middle East and AI-related demand had pushed up prices, flagging the potential for further rate rises ahead.
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