Australia's central bank increases interest rates by 25 basis points, reaching the highest level in almost a year

Australia Raises Interest Rates Again Amid Persistent Inflation

The Reserve Bank of Australia increased its key interest rate for the second consecutive time on Tuesday, bringing it to 4.1%—the highest level since April 2025. This 25 basis point rise matched the forecasts of analysts surveyed by Reuters. The move comes as inflation in Australia remains above the central bank’s 3% ceiling, with ongoing conflict in the Middle East threatening to drive prices even higher.

According to the central bank, “Although inflation has dropped significantly from its 2022 peak, it saw a notable resurgence in the latter half of 2025.” These remarks reflect similar concerns previously voiced by Deputy Governor Andrew.