The Reserve Bank of Australia announced at 2:30pm (AEST) this afternoon that the cash rate will remain at 2.50%.
RBA Governor Glen Stevens cited 4 key reasons behind their decision of continuing to keep interest rates at the same level since the last cut in August 2013:
- Global growth below trend, however an expectation this will increase over the course of the year.
- Unemployment has continued to edge higher
- Resources sector investment spending set to decline significantly
- Inflation in the December quarter was higher than expected.
Looking forward:
- The Bank expects growth to remain below trend for a time yet however strengthening and;
- Unemployment to rise further before it peaks
- Expected further stability in interest rates (i.e. a ‘hold’ bias)
The RBA’s next meeting will be on Tuesday 4th March.
For more information see http://www.rba.gov.au/media-releases/2014/mr-14-01.html