Australia's Treasurer Jim Chalmers said on Tuesday, the “full impact of rate rises still to be felt in the Australian economy.”

"The economy is expected to soften next year and growth is expected to slow as a consequence of higher interest rates as well as the downturn in the global economy,” Chalmers added.

Also read: RBA hikes OCR by 25 bps to 3.10% in December

Market reaction

AUD/USD is preserving gains above 0.6700, induced by the hawkish RBA rate hike decision. The pair was last seen trading at 0.6732, adding 0.55% on the day.