Australia’s central bank raised its key interest rate to a 18-year high, citing the prolonged war in the Middle East and persistent inflationary pressures.
In a statement, the Reserve Bank of Australia said it would lift its cash rate by 25 basis points to 4.85 percent.
“Inflation remains elevated,” it said. “This partly reflects higher fuel and other commodity prices affected by the conflict in the Middle East.”
“AI-related investment is driving rapid growth in prices for technology-related goods, and inflation in many goods and services remains high.”
The hike is the fifth this year, adding to cost-of-living pressures felt by households by increasing home mortgage payments, a politically potent topic in Australia.
