Australian central bank hikes interest rate to 3.85%

CANBERRA, Australia (AP) — Australia’s central bank on Tuesday surprised markets by increasing its benchmark interest rate by a quarter percentage point to 3.85% despite pausing its climb last month and new evidence that inflation is slowing. 

The Reserve Bank of Australia’s meeting on April 4 was the first in a year to leave rates on hold to allow time for the bank’s board to observe the impacts of recent hikes.  

Most economists expected the cash rate would remain steady at 3.6% at the bank’s May meeting. Last week, the Australian Bureau of Statistics reported that inflation in the March quarter had slowed to 7% from 7.8% in December. 

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