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MNI BRIEF: Inflation Drives RBA Hike, Won't Re-Invest Bonds

MNI (Sydney)
SYDNEY (MNI)

A faster pace of price and wage gains drove the decision to raise interest rates.

The Reserve Bank of Australia has a cited a higher than expected increase in inflation in its decision to increase official interest rates for the first time in more than a decade on Tuesday by 25bps to 0.35%.

Underling inflation is now at 3.7%, outside of the RBA’s 2% to 3% target range for the first time in more than ten years, and the central bank is now forecasting it will reach 4.75% this year, see: MNI STATE OF PLAY: RBA Ponders Election-Eve Rate Rise.

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The Reserve Bank of Australia has a cited a higher than expected increase in inflation in its decision to increase official interest rates for the first time in more than a decade on Tuesday by 25bps to 0.35%.

Underling inflation is now at 3.7%, outside of the RBA’s 2% to 3% target range for the first time in more than ten years, and the central bank is now forecasting it will reach 4.75% this year, see: MNI STATE OF PLAY: RBA Ponders Election-Eve Rate Rise.

Keep reading...Show less