Australia central bank raises rates by 25bps to 3.35%

SYDNEY, Feb 7 (Reuters) - Australia's central bank raised its cash rate 25 basis points to a decade-high of 3.35% on Tuesday and reiterated that further increases would be needed, while dropping previous guidance that they were not on a pre-set path.

Wrapping up its February policy meeting, the Reserve Bank of Australia (RBA) said core inflation had been higher than expected and higher rates would be needed to ensure that inflation returns to its target of 2-3%.

Markets had expected a quarter-point move, with some risk of a bigger rise given recent inflation data had surprised on the high side. This was the ninth hike since last May, lifting rates by a total of 325 basis points. (Reporting by Wayne Cole; Editing by Shri Navaratnam)