RBA places rates on hold

The Reserve Bank has decided to leave the cash rate unchanged at 3.25 per cent, commenting that Australia’s economy continued to fare much better than other countries.

While economic conditions were indeed weak, the central bank said that it would be best to allow the substantial macroeconomic policies now in place time to take effect.

“…there has already been a major change in both monetary and fiscal policy. 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,” RBA governor Glenn Stevens said.

“Together with the substantial fiscal initiatives, the cumulative decline in interest rates will provide significant support to domestic demand over the period ahead.”