The Reserve Bank of Australia (RBA) has decided to hold interest rates at 4.75 percent, leaving the official cash rate at the same level it’s sat at since November 2010, when the RBA last increased it by 0.25 percent.
In Governor Glenn Stevens’ announcement, he said the board considered a number of factors when coming to its decision. A string of natural disasters, including the Japanese earthquake and Queensland floods, and the associated slower than expected recovery prompted the decision.
“The supply-chain disruptions from the Japanese earthquake and the dampening effects of high commodity prices on income and spending in major countries have both contributed to the slowing,” Stevens said.
International economic events, such as Greece’s debt issues, also contributed to the decision to keep interest rates the same.
“The banking and sovereign debt problems in Europe have also added to uncertainty and volatility in financial markets over recent months,” Stevens explained.
The Australian economy’s recovery from natural disasters and changes in output will be monitored prior to the next RBA meeting, with Stevens revealing that “in future meetings, the board will continue to assess carefully the evolving outlook for growth and inflation.”