Reserve Bank of Australia interest rate at 7 year high

While the Reserve Bank of Australia signed the fourth consecutive rate hike, it also raised the policy rate to the highest level in 7 years.

The bank increased its policy rate by 50 basis points to 2.35 percent. This was also the expectation of economists participating in the Bloomberg survey.

With the last rate hike, the bank created the fastest tightening cycle. In May, the policy rate in the country was at a record low level of 0.1 percent. With the subsequent interest rate hikes, the interest rate was increased to the level of 2.35%.

The bank also signaled that the increase in the policy rate may continue. Reserve Bank of Australia Governor Philip Lowe said the monetary policy board is predicting an increase in interest rates in the coming months, but this does not point to a predetermined path.