RBA interest rate hike by 25 bps corresponds with market expectations

According to Reuters news agency, Australia's central bank raised its interest rate by 25 basis points for the second month in a row while revising its inflation forecast. The RBA said a further tightening is also likely to be necessary.

Concluding its November policy meeting, the Reserve Bank of Australia (RBA) raised its interest rate to a nine-year peak of 2.85%, the seventh increase in several months.

RBA Governor Philip Lowe said the board will expect further interest rate hikes in the coming period. The bank is paying close attention to the state of the global economy as well as analyzing wage levels, household spending, and pricing factors.

In addition, Lowe said that the effects of monetary policy have been delayed and that the full effect of the interest-rate hike will not yet be reflected in mortgage payments.

According to the RBA, inflation is now expected to peak around 8% later this year, up from a previous forecast of 7.75%.

Rates have already risen 275 basis points since May, and the RBA wanted to slow the pace and see how the sharp tightening has affected consumer spending amid heightened global uncertainty.