RBA interest rates: Reserve Bank increases official cash rate to 3.85% in shock decision

In a decision reached at its meeting today, Australia's reserve bank will lift interest rates, causing further strain to borrowers

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Australians' respite from rising borrowing costs will be a short one, with the Reserve Bank surprising most economists by lifting its key interest rate again and warning more hikes might be needed.

The RBA board raised its cash rate 25 basis points to 3.85% at its monthly meeting on Tuesday, defying investors who had bet the central bank would extend its pause for a second month. The dollar soared and shares sank on the surprise.

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