At its meeting today, the Board decided to increase the cash rate target by 50 basis points to 1.85 per cent.
Reserve Bank of Australia (RBA)
Key Notes of Statement from RBA’s Governor, Philip Lowe (Number 2022-21, 2 August 2022)
- The cash rate target (interest rate) has increased to 1.85 per cent.
- Inflation is at its peak since early 1990s, currently sitting at 6.1 per cent. It is expected to increase again later this year to around 7.75%, and then decrease back to towards the 2-3 per cent target range over the next 2-3 years. Both global and domestic factors are contributing towards growing inflation.
- More people have had success in finding jobs, with unemployment rate remaining low at 3.5 per cent, but higher interest rates and inflation rates have taken a toll on household budgets. Consumer confidence has fallen and housing prices are expected to decline in some markets.
- Overall, the Australia economy is expected to grow strongly this year and continue growing in the next few years.
- Increasing interest rates has been crucial in bringing inflation back to target, normalising monetary conditions and balancing supply and demand within the Australian economy. More changes are expected in the future in order to achieve these goals.
Date revised: 03 August 2022