Reserve Bank Australia lifts cash rate for third month in a row

Australian homeowners with an average-sized mortgage will have to find about 50 Australian dollars (46 U.S. dollars) more for monthly repayments after the Reserve Bank raised the official interest rate again on Tuesday.

Reserve Bank governor Glenn Stevens said with the risk of a serious economic contraction in Australia having passed some time ago, the board had been adjusting the rate to a level consistent with average borrowing rates during the past decade or so.

"As a result of today's decision, rates for most borrowers will be around average levels ... a significant adjustment from the very expansionary settings reached a year ago," Stevens said in a statement.

"The board will continue to assess prospects for demand and inflation, and set monetary policy as needed to achieve an average inflation rate of two-three per cent over time."

Treasurer Wayne Swan said the decision by the RBA to lift the official cash rate again will be tough on families and small business.

"Unfortunately this is one of the difficult consequences of an economy that is recovering better than other advanced economies," Swan told reporters in Canberra.
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