Australia's RBA Raises Rates a Fourth Time as Inflation Fears Materialize

By James Glynn

SYDNEY--The Reserve Bank of Australia raised interest rates by 25 basis points to 4.60% on Tuesday, joining a growing number of global central banks in tightening policy settings to combat persistent inflation risks.

The official cash rate increase marks the fourth hike this year, and markets anticipate another move in November.

The nine-member policy-setting board was unanimous in its decision to raise the OCR.

"Since the previous meeting, some of the upside risks to inflation are materializing," the board said in a statement.

The decision comes as ongoing conflict in the Middle East threatens to keep inflation well above the RBA's 2.5% target.

The board left open the possibility of raising interest rates again this year. A further hike at the next policy meeting in November would lift the OCR to its highest level since 2008.

"The board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed," the statement said.

The Middle East conflict is keeping inflation expectations high, while a boom in artificial intelligence investment is also stoking demand across the economy. "There have been further disruptions to global oil supply and recent data suggest that growth and inflation in Australia have been higher than expected," the board said.

"The board remains focused on ensuring that high inflation does not become embedded."

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

September 29, 2026 01:10 ET (05:10 GMT)