International news: Key interest rate rises in Australia
In a move that many economists saw as inevitable, the Reserve Bank of Australia today raised the cash rate by another 25 basis points on Tuesday.
Any doubt as to whether or not the central bank would continue its policy tightening regime were effectively dashed when Reserve Bank governor Glenn Stevens made the unprecedented move of appearing on a morning TV show to argue against property speculation and warn investors that rates were heading higher in the future.
However, the news will still come as a disappointment to brokers who may have hoped for a reprieve from the Reserve Bank after it also raised rates 25 basis points last month.
The cash rate now sits at 4.25 per cent, which will push most major banks' standard variable rate through the psychologically important seven per cent mark. They could increase even more than that with only the National Australia Bank saying that it would not raise rates over and above the Reserve Bank's increase.