Australia raises interest rates for sixth time in eight months
The Reserve Bank of Australia (RBA) has today elected to lift interest rates from 4.25% to 4.5%, as widely expected.
Australia was the first economy to raise rates from a 50-year low as the economic downturn eased. Other major economies opted for lower interest rates to boost their economies.
Furthermore, it is one of the few developed economies not to have fallen into recession like its counterparts throughout the world.
The Australian economy has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.
Meanwhile, returning to today’s decision, it is the sixth rate rise since October, when rates stood at 3%.
RBA Governor, Glenn Stevens, said the hike to 4.5% from 3% last year represented a “a significant adjustment from the very expansionary settings reached a year ago”.
In a statement, Mr Stevens said: “Australia’s terms of trade are rising by more than earlier expected, and this year will probably regain the peak seen in 2008. This will add to incomes and foster a build-up in investment in the resources sector.”
In the meantime, property prices in Australia have soared by more than one fifth in the last year, the Australian Bureau of Statistics revealed yesterday.
The figures represent the largest annual increase since the Bureau began gathering data in 2002.