The Reserve Bank's legal mandate is inflation-band targeting; though they do keep an eye on exports and employment. It's a tricky act because raising interest pushes down inflation, but it also hurts borrowers, strengthens the dollar and hurts exporters.

The Australian rate is substantially higher than the Federal Reserve's. The Fed has a broader remit and is apparently perfectly happy to run nearly free money for years on end. Compared to the US, Australian monetary policy is quite conservative.