The Reserve Bank of Australia (RBA) has increased its policy rate again. 

In a surprise move, the Reserve Bank of Australia raised its cash rate target by 25 basis points to 3.85 percent, saying inflation in the country was “still very high.” 

Economists had expected mainly the central bank to hold the benchmark interest rate steady at 3.6 percent. 

The Central Bank said in a statement that although the latest data show a decline in inflation, the central forecast is that it will take several years for inflation to return to the top of the target range; Inflation is expected to be 4.5 percent in 2023 and 3 percent by mid-2025. 

The RBA added that its priority is to “return inflation to target,” leaving the door open for further increases in the future: 

“A little more monetary policy tightening may be necessary to ensure inflation returns to target within a reasonable timeframe, but this will depend on how the economy and inflation develop,” the statement said.