Reserve Bank leaves cash rate unchanged

Submitted 4/08/2010

AAP


The Reserve Bank has left the cash rate unchanged following its monthly board meeting today, providing relief for both borrowers and Federal Labor. As widely expected, the central bank left the cash rate at 4.5 per cent for a third straight month. The decision was influenced by key elements of last week's consumer price index proving benign. Reserve Bank governor Glenn Stevens said current interest rates were around the average level of the past decade. "With economic growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the board judged this setting of monetary policy to be appropriate," he said in a statement. If the Reserve Bank board needed any further reasons to leave the cash rate unchanged, then it didn?t have to look any further than two fresh pieces of economic data. The Australian Bureau of Statistics said retail spending grew by just 0.2 per cent, seasonally adjusted, in June to $20.2 billion. That was half the growth economists had predicted. At the same time, building approvals sank for a third straight month. AAP