Eight of nine members backed the May rate hike
The Reserve Bank of Australia increased its rate by 25 basis points to 4.35%. The decision was made due to rising inflation risks from the Gulf conflict.
The board considered two options: holding at 4.10% or raising the rate. Eight of nine members judged the case for a hike to be stronger, citing inflation risks and a lack of confidence in the current rate.
The majority flagged that core inflation was projected to remain above target for an extended period. Members agreed that monetary policy could not alter the near-term trajectory of inflation, and that economic growth would likely remain below potential for some time.