RBA leaves cash rate unchanged

Submitted 3/03/2009

AAP

 

The Reserve Bank of Australia left its key cash rate unchanged at 3.25 per cent after today's monthly board meeting, pausing after 400 basis points worth of cuts since September. While many economists had predicted a further cut of between 25 and 50 basis points, they also suggested the central bank may not move this month to gauge the effect of recent rapid reductions in rates and the Government's two economic stimulus packages.

Financial markets are still predicting further cuts down the track. Commenting on the decision, RBA governor Glenn Stevens said the board judged that the current stance on monetary policy was appropriate.

He said demand had not weakened as much as in other countries and Australia had not experienced the sort of large growth contractions seen elsewhere. "There has already been a major change in both monetary and fiscal policy," Mr Stevens said in a statement.

"Market and mortgage rates are at very low levels by historical standards and business loan rates are below recent averages, reducing debt-servicing burdens considerably." He said the board would consider the position again at the next meeting.