Australia raised its key interest rates by a quarter percentage point Wednesday, its second hike in 2007, to contain inflation.

The Reserve Bank of Australia's cash rate target stands at 6.75% following the increase. In a statement, RBA Governor Glenn Stevens wrote that by the March quarter of next year, both headline and underlying measures of inflation are likely to be above 3% and that growth in aggregate demand will need to moderate if inflation is to be kept to 2-3% in the medium term. The Australian dollar was little changed following the move, and was recently quoted at $0.9318 to a U.S. dollar and bought 106.91 yen.