The Reserve Bank of Australia raises interest rates to 4.85%, an 18-year high

China News Service, Sydney, November 3 (Reporter Bo Wenwen) The Reserve Bank of Australia (Central Bank) announced on the 3rd that it would raise the benchmark interest rate by 25 basis points to 4.85%. This is the fifth time the Reserve Bank of Australia has raised interest rates this year, taking interest rates to their highest level since late 2008.

Of the nine members of the Reserve Bank of Australia's Monetary Policy Committee, six supported the interest rate increase and three advocated keeping interest rates unchanged at 4.6%. The bank issued a statement that day saying that Australia's inflation level is still high and it is expected that the inflation rate will not fall back to the upper limit of the 2% to 3% target range until the end of 2027.

The statement said that the conflict in the Middle East has pushed up the price of fuel and other commodities, and the pressure on Australia's domestic production capacity is also slightly higher than previously judged. Multiple interest rate hikes this year have tightened financial conditions, Australia's economic growth is slowing, house prices have fallen significantly, and the unemployment rate has increased. However, in view of the upward revision of inflation forecasts and persistent upward risks, the Committee believes that further tightening of monetary policy is still necessary to push inflation back to the target range.

According to the Australian Broadcasting Corporation, Reserve Bank of Australia Governor Bullock said at a press conference that day that the central bank does not want to push the economy into recession, but it must reduce inflation. The report quoted economist analysis as saying that if policy tightening is not enough to bring inflation back to the target within a reasonable time, the Reserve Bank of Australia may still raise interest rates further.

Australian Treasurer Chalmers said on the same day that the Australian people are already under great pressure and the impact of previous interest rate hikes has not yet been fully felt, and further interest rate increases will increase their burden. The war in the Middle East has also made Australia's inflation challenge more severe.