The Reserve Bank of Australia (RBA) hiked rates of interest on Tuesday, likely expected, and signalled more hikes this year as it seeks to tame high inflation.

The RBA increased its cash target up by 25 Bps to a more than 10 years high to 3.35%. Bringing the total increase in this interest rate increases cycle to 325 bps.

Consumer price index inflation increased at an annual rate to 7.8% in the Dec quarter biggest increase in more than 30 years.

“RBA Interest Rate Hikes in 2023”

According Lowe, as the consequences of high bond yields started to be experienc. Inflation is anticipat to decrease this year and reach 4.75% by end of 2023.

The RBA governor predicted that unemployment would climb, with national rate estimated to reach 3.75% by the end of 2023 & 4.5% by the middle of 2025.

Australian economic growth slowed down more than expected in the 3rd quarter as a result of high inflation and higher interest rates. In recent months, there has also been a drop in retail sales & consumer confidence.