Australia's central bank raised its benchmark cash rate by 25 basis points to 4.85% on Tuesday, the highest level since November 2008.
The Reserve Bank of Australia's move was in line with expectations from economists polled by Reuters, and marked its fifth rate increase this year.
In its statement, the RBA said that the move was a split decision, with six members voting for the increase and three opting for a hold.
This also comes as the country continues to grapple with high inflation, with the consumer price index rising 4.3% in September, up from 4% in August and marking its highest level since March.
The central bank also said inflation is now expected to "remain elevated through much of 2027," and not expected to fall back into its 2%-3% target range till late 2027, three quarters later than previously forecast.