Tuesday's interest rate hike is the 12th in a particularly assertive tightening cycle.Australia is still on track to bring inflation down without triggering a recession but this "narrow path" is littered with risks, Reserve Bank of Australia Governor Philip Lowe says.- will ensure inflation comes back within its 2-3 per cent target range in a "reasonable timeframe".
"If that happens, expectations will adjust, high inflation will persist, interest rates and unemployment will be higher and the cost-of-living pressures on Australian families will continue."Most observers were expecting the central bank to leave interest rates on hold on Tuesday, amid signs the economy was starting to lose momentum. Instead, it hiked the cash rate by 0.25 per cent to 4.1 per cent.
"Given this shift in risks and the already fairly drawn-out return of inflation to target, the board judged that a further increase in interest rates was warranted."