The Reserve Bank of Australia raised its benchmark interest rate by 0.25 percentage point to 4.60% on Sept. 29, the highest level in 15 years, and left open the possibility of further increases should high inflation persist.
"Inflation has become more of a problem since the last meeting," the RBA said in a statement, adding that it would "continue to take the steps needed to return inflation to target." That includes raising rates further if necessary, the bank said.
Australia's consumer price index for August, due on Sept. 30, is expected to show a 4.1% rise from a year earlier, according to Reuters. That is well above the central bank's target range of 2% to 3%. Core inflation is also seen holding at an elevated 3.6%. The RBA said higher fuel prices were partly passing through to the prices of other goods and services, pointing to an energy-driven inflation shock compounding strains on the country's supply capacity.
The economic toll from successive rate increases is mounting. Australia's housing market has already entered a downturn, and the unemployment rate climbed to 4.6% last month.
