The Reserve Bank of Australia (RBA) announced Wednesday that it has decided to raise interest rates by a quarter of a percentage point to 6 percent, their highest since early 2001.

The latest rates rise came just three months after its last hike.

The RBA said that economic activity was strong across Australia and inflation pressures had increased.

"Given these circumstances, the board judged that an increase in the cash rate was warranted in order to contain inflation in the medium term," it said.

The latest interest rise will force Australians to be more vigilant than ever when it comes to controlling personal finances, according to Mortgage Choice, Australia's leading mortgage broker.

Mortgage Choice's national manager of corporate affairs, Warren O'Rourke, said that the rates hike would place further pressure on homeowners' ability to make ends meet.

However, he said it was an opportune time for people to reassess their budgets to facilitate smarter spending choices.

Housing groups said the hike will make it harder for many people to get into the housing market and hurt those already battling to cope with high petrol prices.

RBA's decision would add 11,000 Australian dollars (8,400 U.S. dollars) in interest payments to the average home loan taken out over 25 years, according to the Real Estate Institute of Australia.

Source: Xinhua