Australia lifts cash rate to 2.85 pct amid 32-year-high inflation

SYDNEY, Nov. 1 (Xinhua) -- Australia's central bank announced on Tuesday a back-to-back interest rate hike for seven months in a row, by 25 basis points to 2.85 percent in a bid to rein in the country's "too high" inflation.

Philip Lowe, governor of the Reserve Bank of Australia, noted in a statement that over the year to September, the CPI inflation rate of Australia was 7.3 percent, the highest it has been in more than three decades.

The central bank's move to increase interest rates materially since May "has been necessary to establish a more sustainable balance of demand and supply in the Australian economy to help return inflation to target," said the governor.

As a further rise in inflation is possible over the coming months, with inflation now forecast to peak at around 8 percent later this year, the central bank's board expects more rate hikes to follow.

The board's priority is to return inflation to the 2-3 percent range over time, Lowe added.

According to a report from the Australian Financial Review, the latest increase takes Australia's cash rate to its highest level since April 2013, while the leap from 0.1 percent to 2.85 percent also marks the fastest tightening cycle in almost 30 years.