Australia Hiked Rates By 25 Bps After Pause
Meanwhile, the European Central Bank (ECB) also expects to raise interest rates as inflation reaches 7% in the Euro Area. While the ECB was set to deliver a 25 bps rate increase in May, the bank may increase the rate by another 50 bps to control inflation and bring it to the 2% target. advertisement Australia Looks for More Rate Hike to Control Inflation The Board of the Reserve Bank of Australia on May 2 meeting decided to raise interest rate s by 25 bps to 3.85%. The central bank also raised the rate paid on Exchange Settlement balances by 25 bps to 3.75%. The hawkish stance caused the Australian dollar to rise while bond futures tumbled traders expect more pressure after Governor Philip Lowe revealed further tightening to being back inflation under the target range. “Inflation in Australia has passed its peak, but at 7% 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 t...