The Reserve Bank of Australia decided in its meeting this morning, Tuesday, 2nd of August, to raise interest rates by 50 basis points, as expected, for the third time in a row, to reach 1.85% from 1.35%.

And the interest statement issued by the bank stated that the bank’s board of directors gives high priority to the return of inflation towards the bank’s target of 2-3% while maintaining the economy in a state of balance Inflation is still high in Australia, the highest since the early 1990s, reaching 6.1% throughout the year in the second quarter ending in June and is expected to reach its peak later this year before starting to decline to the bank’s 2-3% target, where it is expected The bank expects inflation to rise to 7% this year as a peak level.

The Australian economy remains resilient as unemployment fell to 3.5% in June at the lowest rate in nearly 50 years, and underemployment has declined dramatically and business surveys indicate an increase in wage growth.

Household spending behavior represents one of the sources of uncertainty, as despite the recent decline in housing prices, the rise in prices and the rise in interest rates, the household saving rate is still higher than what it was before the epidemic.

The increase in interest rates today is another step in the normalization of monetary conditions in Australia and is required to return inflation towards the target.

The Council expects more steps in the coming months, but it will depend on the data received and the Council’s assessment of inflation expectations and the labor market, and the Council is committed to doing what is necessary to ensure the return of inflation to the target.

The Australian dollar is down about 50 pips against the US dollar, when it traded at 0.6966 levels, where the minutes were less hawkish than before.