Central banks around the world continue to maintain a hawkish stance. Over the past few months, governments of different economies announced back-to-back interest rate hikes, with Australia being the latest one to do so.
It’s a quarter-point hike this time
Wrapping up its October policy meeting on Tuesday, the Reserve Bank of Australia decided to increase the cash rate target by 25 basis points to 2.60%. Alongside, it also increased the interest rate on Exchange Settlement balances by 25 basis points to 2.50%.
Elaborating on the bank’s intention and long-term goal, the Governor of the RBA—Philip Lowe—said in a statement,
“The Board is committed to returning inflation to the 2–3 percent range over time. Today’s increase in interest rates will help achieve this goal and further increases are likely to be required over the period ahead.”
He further added,
“The Board expects to increase interest rates further over the period ahead… The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market.”
The crypto tangent
Even though high-interest rates will put pressure on household budgets, the crypto economy in Australia is expected to grow going forward. A recent survey by YouGov and Swyftx revealed that more than a quarter (26%) of Australians are likely to buy crypto over the next 12 months. The report further noted,
“Around one million non-crypto owning Aussies are expected to enter the market in the next year, with Millennials and Gen Zers the most likely to buy digital assets.“
Crypto adoption rates in the country rose by four percentage points over the last 12 months, with 29% of Australian adults saying they own (21%) or have owned crypto in the past (8%).