Reserve Bank of Australia Raises Interest Rate Amid Inflation Risks from Middle East Conflict

The Reserve Bank of Australia (RBA) raised its official cash rate by 25 basis points to 4.1%, marking a second consecutive increase amid concerns over inflation risks linked to the Middle East conflict. The decision was narrowly approved with a 5-4 vote, reflecting uncertainty about future policy moves. The RBA highlighted that sustained higher oil prices due to the conflict could elevate inflation and slow growth domestically and among trading partners. Following the announcement, the Australian dollar rose slightly before slipping, while bond yields declined.