RBA Raise the Cash Rate, Reduces the Expectations

The Reserve Bank of Australia (RBA) decided to raise the cash rate by 25 basis points to 3.50 percent. Australia was the first major economy that decided to reverse some of its accommodative actions and today’s decision is for the second consecutive month that the central bank raises the borrowing cost. Although the market believes that more increases are still on the horizon but the statement from the bank reduced the expectations, saying that the higher rates would come “gradually”.

The charts below show the market reactions in the two rate decision meetings, today and the October 8.

Reserve Bank of Australia (RBA) Rate Decision on November 3 - 0.25 increase.

Reserve Bank of Australia (RBA) Rate Decision on October 8 - 0.25 increase.