Australia Raises Key Interest Rate By 25 Bps

(RTTNews) - The Reserve Bank of Australia raised its benchmark interest rate for the fifth time this year to bring inflation back to the target.

The board, governed by Michele Bullock, voted 6-3 to lift the cash rate target by 25 basis points to 4.85 percent on Wednesday, as widely expected.

The bank has raised its key rate by 125 basis points so far this year.

"Given the revised inflation outlook and the continuing upside risks, the Board judged that a further tightening in financial conditions is warranted to support the return of inflation to target," the bank said in a statement.

The bank expects inflation to remain above 3 percent for the coming year and noted that there is an increasing risk that higher inflation expectations will become embedded.