The Reserve Bank of Australia (RBA) is the country's central bank, responsible for setting monetary policy and maintaining price stability. When the RBA lifts the official cash rate, it means that it is tightening monetary policy by making it more expensive for banks to borrow money from the central bank.

In this scenario, the RBA has raised the official cash rate by 25 basis points, which means that the new rate is now 3.85%. This marks the 11th hike in the RBA's tightening cycle, which began in November 2020. The previous cash rate was 3.60%.

The decision to raise interest rates reflects the RBA's view that the Australian economy is growing strongly and that inflationary pressures are building. By raising interest rates, the RBA is seeking to dampen inflationary pressures and prevent the economy from overheating.

The last time the cash rate was at this level was in April 2012, so this represents a significant increase in borrowing costs for households and businesses. The impact of the rate hike on the economy will depend on a range of factors, including the level of household and business debt, the state of the housing market, and the global economic environment.