Australia raised its interest rates for the first-time in over a decade. This was widely anticipated as consumers prices rise.

Its central bank said Tuesday that the cash rate will be increased by 25 basis points to 0.35% — the first rate hike since November 2010.

Philip Lowe (Gouvernor of the Reserve Bank of Australia) said that it was the right moment to start withdrawing “extraordinary monetary support”, which was set up to assist the Australian economy in the aftermath of the pandemic.

Lowe released a statement saying that the economy had been resilient, with inflation rising faster and at a greater level than anticipated. There is evidence of wage growth. With this evidence and low interest rates it makes sense to begin normalizing monetary conditions.

Given the rising inflation rate, analysts had expected that the rates would rise. The prices for food, petrol, and other consumer goods increased in the past quarter.

The quarter’s Australian consumer price index rose 2.1%, which is higher than the 1.7% expected. Last week’s data shows that.

Consumer inflation rose 5.1% annually, which is the highest level since 2001 and higher than analysts’ forecasts of an increase of 4.6%.

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