This brings the cash rate to the highest point since August 2013 when it was cut from 2.75% to 2.50%.
This was slightly at odds with what many bank economists expected, though there have been some calls to increase now by 25 basis points so the RBA can assess the impact of taking the cash rate from 0.10% in April to 2.60% in October.
CommBank head of Australian economics Gareth Aird said there's typically a three-month lag time between interest rate hikes and when consumers feel the impact, and was the only major bank economist to correctly forecast the 25bps increase.
In a statement, RBA Governor Dr Philip Lowe says the central bank moved by the standard amount to assess the previous hikes' impacts on inflation and economic growth.
"One source of uncertainty is the outlook for the global economy, which has deteriorated recently. Another is how household spending in Australia responds to the tighter financial conditions," Dr Lowe said.
"Higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments. Consumer confidence has also fallen and housing prices are declining after the earlier large increases."
Need help with a home loan?