The Reserve Bank of Australia (RBA) has decided to raise the cash rate by 25 basis points, taking it to 3.35 per cent – its highest level since September 2012. This decision was made in response to the recent inflation data which showed that the consumer price index (CPI) had risen to its highest level since 1990. Experts have suggested that this rate hike will help to keep inflation in check. Commenting on the move, Anneke Thompson of CreditorWatch said the RBA clearly wants to see evidence of a cooling economy before pausing any further increases. She also added that what the RBA does next will depend heavily on the January retail trade result, as well as the moderating inflation rate. The International Monetary Fund (IMF) has also recommended that the RBA should continue to raise interest rates in the near term to help support monetary policy.