Australian cash rate rises for 7th straight month to 2.85% to 9-yr high

Australia's central bank boosted its benchmark interest rate on Tuesday for a seventh consecutive month to a nine-year high of 2.85 per cent.

The Reserve Bank of Australia's decided on a second consecutive quarter-percentage-point rise in the cash rate at its latest monthly board meeting following four consecutive half-percentage-point hikes.

When the bank lifted the rate by a quarter percentage point in May, it was Australia's first rate hike in more than 11 years. The cash rate is now at its highest point since May 2013, when the bank cut the rate from 3 per cent to 2.75 per cent.

Reserve Bank Gov. Philip Lowe said in a statement inflation in Australia is too high, and his board expects to increase interest rates further over the period ahead.

The bank remains resolute in its determination to return inflation to a target band of 2 per cent to 3 per cent by raising the cost of money, Lowe said.

Inflation rose from an annual rate of 6.1 per cent in the June quarter to 7.3 per cent