Reserve Bank of Australia consecutive rate hikes to combat inflation

The Reserve Bank of Australia has put up the cash rate from 0.1% to 1.85% in 4 consecutive hikes to combat inflation. The inflation rate of 6.1% is the highest since the early 1990s. RBA expects inflation to peak at the end of the year and then decline to 2-3%.

What does this mean for interest rates?

There will likely be more rate rises over the months ahead. NAB expects the cash rate target to reach 2.85% by Dec 2022. The banks are likely to pass on all rate hikes in-full to customers. So, keep in mind that by the end of the year, there may be an additional 1% increase in interest rates to your variable loans.

Source: Reserve Bank of Australia