Australia Raises Key Interest Rate Abruptly for the First Time in 11 Years and 6 Months

[Asia Economy Reporter Jeong Hyunjin] Australia has unexpectedly raised its benchmark interest rate for the first time in 11 years and 6 months.

On the 3rd (local time), according to CNBC and others, the Reserve Bank of Australia (RBA) held a monetary policy meeting and raised the benchmark interest rate by 0.25 percentage points. Accordingly, the benchmark interest rate rose from 0.10% to 0.35%.

This is Australia's first benchmark interest rate hike since November 2010, about 11 years and 6 months ago.

CNBC reported that this move is interpreted as a measure to curb soaring consumer prices ahead of the general election on the 21st of this month. The consumer price inflation rate for last month, compiled by the Australian Bureau of Statistics (ABS), was 5.1%, marking the highest level since 4.7% in March 2001.

Philip Lowe, Governor of the RBA, said, "The rise in inflation is due to global factors," adding, "In addition, domestic production capacity constraints have occurred, making it likely that companies will pass on increased costs to consumers, thereby expanding inflationary pressures."