SYDNEY, May 2 (Reuters) - Australia's central bank on
Tuesday stunned markets by raising its cash rate 25 basis points
when traders had looked for an extended pause, saying inflation
was way too high and even higher rates might be needed to bring
it to heel.
Wrapping up its May policy meeting, the Reserve Bank of
Australia (RBA) lifted rates to 3.85% and said "some further"
tightening may be required to ensure that inflation returns to
target in a reasonable timeframe.
Markets had been wagering heavily on a steady outcome given
core inflation had eased a little more than expected and the
full pain of the RBA's past tightening was yet to be felt in the
economy. (Reporting by Wayne Cole; Editing by Shri Navaratnam)
Messaging: wayne.cole.thomsonreuters.com@reuters.net))
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