CANBERRA, Dec. 1 (Xinhua) -- The Reserve Bank of Australia (RBA)on Tuesday raised the cash rate for an unprecedented third month in a row, tightening retail spending ahead of the Christmas period.     

    As expected the central bank raised the cash rate by further 25basis points to 3.75 percent at Tuesday's board meeting.

    The move will add around 47 Australian dollars (42.9 U.S dollars) a month to repayments on an average 300,000 Australian dollars (274,715 U.S dollars) mortgage, assuming retail banks match the move.

    Announcing the decision, RBA Governor Glenn Stevens said with the risk of serious economic contraction having passed, the board has moved to gradually lessen the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.

    Stevens indicated that the increases over the last three months to the official cash rate will help to make the economic recovery sustainable and keep future inflation under control.

    "These material adjustments to the stance of monetary policy will, in the board's view, work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead," he said.

    "Credit for housing is expanding at a solid pace, and dwelling prices have risen significantly this year,"

    "Share markets have recovered significant ground, which together with higher dwelling prices has meant a noticeable recovery in household wealth."

    Stevens suggested that the Australian economy was in good shape in comparison to the rest of the world and that economic growth should be in line with trends at 3 percent and unemployment outlooks lower than expected.

    "The rate of unemployment is now likely to peak at a considerably lower level than earlier expected.'' he said.     

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