Australia Raises Interest Rate to 15-Year High Amid Rising Inflation

Australia’s central bank has raised its key interest rate to a 15-year high, citing rising fuel prices, escalating Middle East tensions and growing inflationary pressures.

The Reserve Bank of Australia (RBA) increased its cash rate by 25 basis points to 4.6 percent on Tuesday, warning that disruptions to global oil supplies and higher energy prices are pushing up the cost of goods and services.

The bank said recent data showed stronger-than-expected economic growth and inflation in Australia. It also noted that strong AI-related investment and demand are contributing to higher prices for technology-related goods globally.

Meanwhile, a slowdown in Australia’s housing market has added to economic uncertainty, with housing prices declining in most state capitals and new housing lending falling significantly.

The RBA said it would continue monitoring the impact of energy prices, global developments and domestic economic conditions on inflation.