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Reserve Bank of Australia - Source: ONE News -
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The Reserve Bank of Australia (RBA) has raised the cash interest
rate and says it is prudent to begin lessening the monetary policy
stimulus in the local economy because conditions are
improving.
It has lifted the cash rate by 25 basis points to 3.25 per cent
after its board meeting on Tuesday.
The move was not widely expected, with most economist tipping the
central bank would leave rates unchanged.
But recent economic data has pointed to improving conditions in
Australia, which has been buffeted by the global downturn over the
past year.
"With growth likely to be close to trend over the year ahead,
inflation close to target and the risk of serious economic
contraction in Australia now having passed, the board's view is
that it is now prudent to begin gradually lessening the stimulus
provided by monetary policy," RBA governor Glenns Stevens said in a
statement.
"This will work to increase the sustainability of growth in
economic activity and keep inflation consistent with the target
over the years ahead."
