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Australian homeowners have been hit again with the Reserve Bank of Australia rising the official cash rate to 7.25 per cent, the highest rate in 12 years.
Announcing the rate decision RBA Governor Glenn Stevens said the rate adjustment was made in order to contain and reduce inflation over the medium-term.
"Inflation is likely to remain relatively high in the short-term, and will probably rise further in year-ended terms, before moderating next year in response to slower growth in demand," Mr Stevens said in a statement.
"Having weighed both the international and domestic information available, the board concluded that a further tightening in monetary policy was needed to secure an inflation rate of 2-3 per cent over time.
"As a result of this and earlier actions, and rises in borrowing costs which are occurring independently of changes in the cash rate, the overall tightening in financial conditions since the middle of 2007 is substantial.
"The board will continue to evaluate prospects for economic activity and inflation in the light of new information."
- AAP