Australian Central Bank Raises Interest Rates To 3.5%

(RTTNews) - Tuesday, the Reserve Bank of Australia raised the cash rate, it key interest rate, by 25 basis points to 3.5%, effective from November 4.

The central bank said economic conditions in Australia have been stronger than expected, with measures of confidence showing a recovery. “With the risk of serious economic contraction in Australia now having passed, the Board’s view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker”, the RBA said.

“The adjustments at the October and November meetings will work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead”, the central bank added.

Meanwhile, the RBA pointed out that with global economy having resumed growth, and policy settings likely to remain expansionary for some time, the recovery is likely to continue into 2010, with the forecasts being revised higher.

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