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:

  1. Global growth below trend, however an expectation this will increase over the course of the year.
  2. Unemployment has continued to edge higher
  3. Resources sector investment spending set to decline significantly
  4. Inflation in the December quarter was higher than expected.

Looking forward:

  1. The Bank expects growth to remain below trend for a time yet however strengthening and;
  2. Unemployment to rise further before it peaks
  3. Expected further stability in interest rates (i.e. a ‘hold’ bias)

The RBA’s next meeting will be on Tuesday 4th March.

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