Australia’s central bank on Tuesday raised its policy rate to 4.35%, its highest level since December 2024, amid elevated inflation.
The move by the Reserve Bank of Australia was in line with expectations in a Reuters poll of economists and marked the third consecutive rate increase.
Eight members of the RBA’s board voted for the rate hike, while one member voted to hold rates at 4.1%.
In its release, the RBA said that inflation had picked up materially in the second half of 2025, and that the conflict in the Middle East had led to sharply higher fuel and related commodity prices, further adding to inflation.
“As expected, developments in the Middle East are having an impact on inflation. Higher fuel prices are adding to inflation and there are indications that this is likely to have second-round effects on prices for goods and services more broadly,” it added.
