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Australia lifts cash rate to 3.35% with 9th rate hike

CANBERRA, Australia (AP) — Australia's central bank on Tuesday lifted its benchmark interest rate for a ninth consecutive time to 3.35% as it battles inflation that rose to 7.8% in the latest quarter.

The Reserve Bank of Australia’s decision to increase its cash rate by 0.25 of a basis point was widely anticipated after the annual inflation rate for the December quarter was the highest since 1990.

“High inflation makes life difficult for people and damages the functioning of the economy,” Reserve Bank Governor Philip Lowe said in a statement.

“And if high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later,” he added.

The board has been raising interest rates to try to bring inflation within the bank’s target band of 2% to and 3%, while hoping to avoid recession, he said.

“But the path to achieving a soft landing remains a narrow one,” Lowe said.