Uncertainty convinces RBA to hold rates

Despite improvements in consumer sentiment and some better than expected indicators of domestic economy, the Reserve Bank is not convinced it's time to raise rates. Minutes from the September RBA meeting released yesterday reveal that "some uncertainty" remains about the outlook both abroad and at home.

"Members had agreed that if the economy continued to evolve as in the latest forecasts, the Bank would in due course need to adopt a less expansionary policy stance. The information at this meeting suggested that economic conditions were indeed evolving broadly in that way. Nonetheless, some uncertainty remained about the outlook both abroad and at home," it said.

The RBA noted that policy decisions in the near future involved balancing the risk of "over-staying an accommodative stance" and that of prematurely tightening conditions and adversely affect confidence and demand.

"The meeting concluded that the balance was best struck by leaving the cash rate unchanged for the time being, pending further evaluation of incoming information at future meetings."