RBA raises cash rate to 3.85%

The Reserve Bank of Australia (RBA) has increased the cash rate at May’s monetary policy meeting, taking it from 3.60% to 3.85%.

The move comes despite the Australian Bureau of Statistics’ quarterly consumer price index showing annual inflation slowed to 7.0% in the first three months of 2023 from 7.8% in the December quarter.

However, this is still well above the RBA’s 2-3% target, so the central bank believes more cash rate rises are necessary to slow the economy further.