Australia’s central bank kept its main cash rate steady at 3.25 per cent on Tuesday, surprising some in markets who had looked for a cut given an uncertain global outlook, a high local dollar and lower export prices.
The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting. Most analysts had felt the RBA would cut rates to 3.0 per cent, though markets had put the odds at less than 50-50.
Following the news the Australian dollar gained half a US cent, jumping to a session high of $1.0418 , showing a gain of 0.5 per cent on the day. It touched a peak of $1.0420 last week, its strongest since late September.
The RBA said recent indications on the world economy were more positive.
Last month it slashed 25 basis points off the cash rate, taking it to lows not seen since October 2009 when it first resumed hiking rates following the global downturn.
Central bank governor Glenn Stevens said the RBA “judged that the stance of monetary policy was appropriate for the time being”.
