SYDNEY, (Reuters) – Australia’s central bank increased its cash rate by a surprising 50 basis points on Tuesday to 0.85%. It also indicated that it would need to tighten further as it fights against rising inflation.

The Reserve Bank of Australia (RBA) concluded its June policy meeting by stating that, given the current inflation pressures, and still low rates, it decided to increase the rate of interest by 50 basis points.

There was a split in the markets over whether rate hikes would be 25 basis points or forty basis points. [AU/INT]