Reserve Bank of Australia (RBA) has announced an increase in the cash rate target for May 2023 after the board meeting held on 2nd May 2023.
After a pause on the cash rate target last month, the cash rate target has increased by 25 basis points. The cash rate target for May 2023 now sits at 3.85 per cent – still the highest cash rate target since 10 years ago.
The Reserve Bank of Australia’s Board’s priority remains to return inflation to target (2-3 per cent range). High inflation makes life difficult for people and damages the functioning of the economy. Hence, although inflation in Australia has passed its peak and is currently at 7 per cent, it is still too high and it will be some time yet before it is back in the target range. Given the importance of returning inflation to target within a reasonable timeframe, the Board has judged that a further increase in interest rates was warranted.
Date revised: 02 May 2023