Financial markets had priced in little chance of another rate rise in Australia.SYDNEY—The Reserve Bank of Australia surprised financial markets by raising interest rates a month afterof earlier tightening on the economy, illustrating how central banks are wary of declaring victory over inflation.
The RBA lifted its official cash rate by a quarter of a percentage point to 3.85%, arguing that while inflation had already peaked it was still too high at 7% and could take a couple of years before it reaches the top end of a 2% to 3% target range.
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