10:43 - 2.05.2023

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May 2, Fineko/abc.az. The Reserve Bank of Australia (RBA) raised on Tuesday its key interest rate by 25 basis points (b.p.) to 3.85% per annum.

ABC.AZ reports that this decision came as a surprise to analysts. According to the consensus forecast provided by Trading Economics, the market expected the rate to remain at the same level.

In April, the Australian Central Bank did not change the rate, making a pause in the policy tightening cycle. Statistical data for the 1st quarter showed a slowdown in inflation in Australia to 7% from 7.8% in the 4th quarter of 2022, and experts expected that the RBA would abandon further policy tightening.

However, according to Australian Central Bank’s leaders, inflation is still too high to stop the rate hike.

"Inflation in Australia has peaked, but 7% is still too high, and it will take time for it to return to the target level," RBA governor Philip Lowe stated on Tuesday.

Since last May, this is the 11th increase in the cost of lending, the total rate was raised by 375 b.p.