Australia’s central bank raises rates for the 2nd time in 5 weeks

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CANBERRA, Australia (AP) — Australia’s central bank on Tuesday raised its benchmark interest rate for the second time in five weeks, pushing the cash rate from 0.35% to 0.85%.

When the Reserve Bank of Australia raised the rate by a quarter of a percentage point at its last monthly board meeting on May 3, it was the first rate hike in more than 11 years.

A rise was widely expected after official data released in April showed inflation in Australia had risen to 5.1% in the year to March. This is the highest annual rate since 2001, when a new 10% federal consumption tax created a temporary spike.

Treasurer Jim Chalmers announced further rate hikes on Tuesday, saying inflation in Australia would worsen.

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