Reserve Bank’s Cash Rate Decision - Going Harder in Fight Against Inflation

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The RBA delivered a rate hike of 50 basis points today, taking the cash rate to 0.85%. It is the biggest move in 22 years. It follows a 25 basis point rate hike in May, which kicked off the RBA’s tightening cycle after headline inflation cracked 5.1% per annum in the March quarter.

The consecutive rate rises more than fully unwind the 65 basis points of emergency rate cuts the RBA implemented at the start of the pandemic. And these back-to-back rate hikes, totalling 75 basis points, are the biggest in a two-month window since December 1994.

It’s a strong signal that the RBA is prepared to move harder in the fight against inflation.

Download – 7 June 2022 economic update.

See our short video below to find out more.

Economic Insights - 9 June 2022

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Inflation and rate hikes remain front of mind for households and businesses. This week, we received an update on how consumer and business confidence is faring in the face of strong inflation and the first increase in the cash rate in more than a decade.
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This week, the Reserve Bank raised the official cash rate by 25 basis points from a record low of 0.1%. The cash rate now stands at 0.35%. This was the first hike since November 2010 and marks the beginning of the end of ultra-cheap money.
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The Reserve Bank’s (RBA) April board meeting quickly regathered the attention of headlines last week. The RBA has turned a corner and has laid the groundwork for its first cash rate hike in over a decade, making the question of ‘when’ all the more important.
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