The July edition of the Reserve Bank of Australia (RBA) policy meeting ended with the central bank’s decision to raise interest rates by 50 basis points to 1.35%, as widely expected by the market.
This is an increase for the third consecutive month implemented by the RBA to fight inflation pushing interest rates to levels never seen since May 2019.
Following the decision, policymakers continued to reiterate earlier statements that substantial monetary support was no longer needed due to economic strength and current inflationary pressures.
Governor Philip Lowe, meanwhile, expressed confidence that the economy could survive with a strong job market, where unemployment remained at its lowest level in nearly 50 years.
He added that policymakers are expected to take further steps in the process of normalizing monetary policy in Australia in the coming months.
The central bank is also committed to doing what is necessary to ensure inflation in Australia returns to target over time.
Following the RBA's latest decision, the Aussie dollar however failed to react by trading hovering around 0.6860 against the USD.
This reaction may be due to investors having ‘price in’ first on Aussie dollar trading before the decision of the RBA policy meeting.
