The Reserve Bank of Australia (RBA) increased its policy rate to 1.85%.

The Reserve Bank of Australia increased the policy rate by 50 basis points to 1.85 percent. The central bank noted that interest rate hikes would continue.

The central bank indicated that the interest rate increase is a further step in the “normalization” policy, which refers to the end of the “extraordinary” interventions that support the economy.

Governor of the Reserve Bank of Australia Philip Lowe said in a statement following the meeting: “Today’s increase in interest rates is the next step in the normalization of monetary conditions in Australia. The recent increase in interest rates was required to bring inflation back to target and establish a more stable Australian economy.

In the upcoming months, “the Board anticipates taking further measures toward normalizing monetary conditions, but not on a predefined path. Future interest rate rises will be determined by the amount and timeliness of new data as well as the Board’s evaluation of the outlook for inflation and the labor market. Board is determined to take the necessary steps to ensure that Australia’s inflation gradually returns to its goal.” Lowe said.