RBA lifts cash rate to 0.35 per cent

The Reserve Bank of Australia has raised the cash rate by 0.25 percentage points to 0.35 per cent following Tuesday’s monthly board meeting, coming after last week’s strong inflation figures

It is the RBA’s first rate increase since November 2010 and after holding the rate at a record low 0.1 per cent since November 2020.

RBA governor Philip Lowe said the board judged that now is the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.

“The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected,” Dr Lowe said.

“There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.”

By Colin Brinsden, AAP Economics and Business Correspondent in Canberra