Reserve Bank of Australia lifts interest rates to combat rising inflation
What's happening
The Reserve Bank of Australia (RBA) has lifted interest rates by 25 basis points to 0.35%, the first increase since 2010. The move comes as the RBA seeks to combat rising inflation, which has been pushed higher by global supply chain disruptions and the war in Ukraine.Why it matters
The RBA's decision to raise interest rates is a significant departure from its previous stance of keeping rates on hold until inflation was closer to the bank's target of 2-3%. However, the RBA has signaled that it is willing to take action to bring inflation under control even if it means raising interest rates and slowing economic growth.What's next
The RBA's decision to raise interest rates is likely to have a significant impact on the Australian economy. Higher interest rates will make it more expensive for businesses to borrow money, which could lead to slower economic growth. Higher interest rates will also make it more expensive for consumers to borrow money, which could lead to lower consumer spending.What to do
If you're concerned about the impact of higher interest rates on your finances, there are a few things you can do: - **Talk to your bank**. Your bank can provide you with advice on how to manage your finances and debt in a rising interest rate environment. - **Consider consolidating your debts**. Consolidating your debts into a single loan can help you lower your interest payments and make it easier to manage your debt. - **Increase your savings**. Increasing your savings can help you build a financial cushion to weather any financial difficulties that may arise from higher interest rates.
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