Australia's Treasurer Jim Chalmers said on Tuesday, “inflation is the number one challenge in our economy.”

His comment comes after the Reserve Bank of Australia (RBA) hiked the policy rate by 25 bps to 2.85% at its November meeting this Tuesday, as widely expected. The central bank revised down its GDP forecasts for this year and the next two years.

Market reaction

AUD/USD is holding gains above 0.6400 following the RBA rate hike decision and the above comments. The pair was last seen trading at 0.6417, adding 0.33% on the day.