Australia hiked its interest rate for the first time in more than a decade, a widely expected move as consumer prices surge.

Its central bank said Tuesday that the cash rate will be increased by 25 basis points to 0.35% — the first rate hike since November 2010.

Philip Lowe, governor of the Reserve Bank of Australia, said it is the right time to begin withdrawing some of the “extraordinary monetary support” that was put in place to help the Australian economy during the pandemic.

“The economy has proven to be resilient and inflation has picked up more quickly, and to a higher level, than was expected,” Lowe said in a statement. “There is also evidence that wages growth is picking up. Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions.”

Analysts had widely expected the country to hike rates, given that inflation was fast heating up in the country. Prices of food, petrol and other consumer goods were all up in the last quarter.

Australia’s consumer price index jumped 2.1% for the quarter, exceeding expectations of a 1.7% increase. , data showed last week.

On an annual basis, consumer inflation rocketed 5.1% – the highest since 2001, and again higher than analyst forecasts of a 4.6% increase.

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