Australian central bank raises interest rate by 50 basis points

By Gokhan Ergocun

ISTANBUL (AA) – Australia’s central bank on Tuesday raised the cash rate by 50 basis points to 85 basis points in an effort to curb the surging inflation.

The Reserve Bank of Australia also increased the interest rate on exchange settlement balances by 50 basis points to 75 basis points, according to a statement issued by the bank.

"Inflation in Australia has increased significantly. While inflation is lower than in most other advanced economies, it is higher than earlier expected,” the bank said.

"Global factors, including COVID-related disruptions to supply chains and the war in Ukraine, account for much of this increase in inflation," it added.

Domestic factors have also impact on the prices, according to the bank.

The central bank expected the inflation rate would continue to increase this year, but it would decrease next year.