Australian central bank lifts key interest rate to 18-year high

The Reserve Bank of Australia has increased its key interest rate to a 18-year high, citing inflationary pressures and the ongoing conflict in the Middle East. The central bank announced on Tuesday that it will raise its cash rate by 25 basis points to 4.85%. Inflation remains elevated, partly due to higher fuel and commodity prices affected by the conflict.

The hike is the fifth this year and will contribute to cost-of-living pressures, particularly for those with home mortgages. The Reserve Bank of Australia warns of continued uncertainties about the outlook for domestic economic activity and inflation, noting that global oil supply disruptions are maintaining upward pressure on energy prices and inflation.