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Thursday 03rd of March 2011
March 1, 2011    

Australia leaves interest rates on hold

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by Kay Murchie

The Reserve Bank of Australia (RBA) has today elected to keep interest rates on hold at 4.75% – for the fourth consecutive month.

The move, which was widely expected, comes as inflationary pressures subside and the rate is expected to remain within its target this year.

Australia was the first economy to raise rates from a 50-year low as the economic downturn eased. Other major economies opted for lower interest rates to boost their economies.

The country is one of the few developed economies not to have fallen into recession like its counterparts throughout the world as it has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

Meanwhile, central bank governor, Glenn Stevens, comments: “At today’s meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macro-economic outlook.”

Australia has benefited from strong economic growth but last month Treasurer Wayne Swan warned that recent flood and cyclone disasters has led to a fall in coal and agricultural exports and could hit growth in the first quarter.

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