The Reserve Bank of Australia announced an interest rate rise for the first time in more than 10 years in response to increasing inflation.
Philip Lowe, governor of the Reserve Bank of Australia (RBA), announced that the cash rate had been raised from 0.1 percent to 0.35 percent.
“The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time. This will require a further lift in interest rates over the period ahead," Dr Lowe said in his official statement.
The Reserve Bank of Australia regulates interest rates to keep inflation within a band of 2 to 3 percent.
The core inflation rate in Australia rose to 5.1 percent by March 2022 - its highest level in the past 22 years, according to a statement published on Wednesday by the Australian Bureau of Statistics (ABS).
As noted by the bureau, the highest increases over the past 12 months were in the price of gas (up 35.1 percent) and residential property (up 13.7 percent).
The ABS said in a statement that Australia's significant rise in inflation was primarily because of a global rise in the price of goods and services, as well as global disruptions in supply chains, rising transport costs and a number of other "global inflationary factors". Initially, the Australian Ministry of Finance had predicted the country's core inflation to rise to 4.2 percent by July 2022.