The Reserve Bank of Australia (RBA) lifted its cash rate target to 4.85%, its highest level since 2008, as official measures showed different readings of September inflation.
Six of the nine Monetary Policy Board members backed the 0.25-percentage-point increase, while three favored keeping the target at 4.60%. The change takes effect Nov. 4. It is the fifth increase this year, following rises effective Feb. 4, March 18, May 6 and Sept. 30, according to the RBA's rate history.
The Australian Bureau of Statistics (ABS) reported that its monthly Consumer Price Index measure rose 4.3% in the 12 months through September. Its monthly trimmed-mean measure, which reduces the effect of some price swings, was 3.6%.
The RBA's quarterly series showed headline inflation of 3.9% and trimmed-mean inflation of 3.7% for the September quarter. The monthly and quarterly figures cover different periods. The rate decision and inflation outlook were covered earlier by EconoTimes.
In its November outlook, the RBA pointed to fuel and commodity prices and domestic capacity pressures. It also cited higher prices for technology goods amid AI investment, while saying AI-related costs had made only a modest contribution to consumer prices so far.
The bank forecasts inflation at 2.7% over the 12 months to December 2027, then a return to its 2.5% midpoint around mid-2028. The RBA's target range is 2% to 3%. It also described a tighter international policy backdrop, saying central banks in most advanced economies had raised policy rates or were expected to do so.
The cash rate target guides the cost of overnight unsecured borrowing between banks and influences lending and savings rates. The RBA's next board meeting is scheduled for Dec. 7-8, with the decision due at 10:30 p.m. ET Dec. 7 (03:30 UTC Dec. 8).
