In a recent decision, the Board of Australia's central bank has increased the cash rate target by 25 basis points to 4.35 percent. This move comes as inflation in Australia remains persistently high, with the latest CPI readings indicating ongoing price increases in many services. While the central forecast suggests a decline in CPI inflation, it is expected to hover around 3.5 percent by the end of 2024, potentially reaching the top of the 2 to 3 percent target range by the end of 2025. The decision to raise interest rates is driven by the need to ensure a timely return to the target inflation rate. The Board had kept interest rates steady since June, with a focus on balancing supply and demand in the economy, and is now acting to address inflation concerns.
