Australia's Central Bank Takes Unexpected Turn with Interest Rate Hike

Australia's central bank raised its interest rate to 3.85% amid rising inflation, after lowering it previously. This marks the first hike since November 2023, as inflation surged to 3.8% by December. Despite global economic uncertainty, Australia's economy grows, prompting discussion on potential future rate hikes.

Australia's central bank has made a surprise move, raising its benchmark interest rate by a quarter percentage point to 3.85%. This decision comes after a series of rate cuts last year and amidst rising inflation figures.

The hike, the first since November 2023, follows a report showing inflation reaching 3.8% by December. The bank aims to manage inflation within a target range of 2% to 3%, even as economic uncertainty looms worldwide.

Despite the global challenges, Australia's economy has shown resilience, with significant growth and trade activities. Treasurer Jim Chalmers acknowledged the challenges this rate hike poses to Australians, while Chief Economist Cherelle Murphy highlighted the unexpected economic dynamism.