The Reserve Bank of Australia (RBA) board members decided to raise its official cash rate (OCR) by another 25 basis points (bps) from 3.10% to 3.35%, as widely expected, when they met at their February 7 monetary policy meeting, the first of this year.

According to the latest Reuters poll, the RBA was expected to deliver a fourth successive quarter-point interest rate hike on Tuesday. The central bank would likely follow it up with a fifth in March as it continues its battle to tame inflation.

AUD/USD reaction

In an immediate reaction to the RBA decision, the AUD/USD pair leaped nearly 30 pips to test 0.6950. At the time of writing, the Aussie is up 0.92% on the day, trading at 0.6944.

AUD/USD: 15-minutes chart

About the RBA rate decision

RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.