ISTANBUL

The Reserve Bank of Australia (RBA) increased its policy rate by 25 basis points to 3.85% on Tuesday.

The bank also increased the rate paid on exchange settlement balances by 25 basis points to 3.75%.

The RBA stressed that the inflation has passed its peak but the current level of 7% is still "too high."

"The Board judged that a further increase in interest rates was warranted today," it added.

It held interest rates constant at the last meeting in April.