Reserve Bank of Australia hikes interest rates by 25 bps to 4.35%

Inflation forecasts have been adjusted, with the latest projections indicating a decline to about 3.5 per cent by the end of 2024 and settling within the target range by the end of 2025. The central bank's assertive action comes after a period of steady rates since June and a cumulative increase of 4 percentage points since the previous year, Michele Bullock, governor, Reserve Bank of Australia, said in a statement.

The economy, while growing slower than usual, has outperformed expectations in the first half of the year. However, the labour market's robustness is showing signs of easing, and housing prices continue to surge. Despite these challenges, the Board's priority remains to bring inflation back to its target to mitigate the broader economic impact.

The Bank's future policy decisions will hinge on incoming data and the ongoing assessment of risks, with a steadfast resolve to anchor inflation expectations firmly within the target range.

ALCHEMPro News Desk (KD)