The Reserve Bank of Australia (RBA) has kept interest rates on hold for the fourth consecutive month, leaving the cash rate at 3 per cent, a 49 year low.
In the central bank’s board meeting earlier today, governor Glenn Stevens said improved consumer confidence had fuelled the RBA’s decision to leave the rate unchanged.
“Economic conditions in Australia have been stronger than expected a few months ago. Measures of confidence have recovered a good deal of ground. This suggests that the risk of a severe contraction in the Australian economy has abated. The most likely outcome in the near term is a period of sluggish output,” Mr Stevens said.
According to Mr Stevens, the present setting of monetary policy is appropriate given the economy’s circumstances.
However, he said the board would continue to monitor how economic and financial conditions unfold and impinge on prospects for sustainable growth.