Australia central bank hikes rates to 12-year high of 4.35%

Australia's central bank raised interest rates to a 12-year high on Tuesday, ending four months of steady policy and left the door open to further tightening if necessary to bring inflation to heel. Wrapping up its November policy meeting, the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to 4.35%, bringing hikes since May last year to 425 basis points.

Markets and analysts had favoured a hike given policy makers had warned they had little tolerance for inflation which had surprised on the high side in the third quarter.

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