Interest rates remain at three per cent

The Reserve Bank today decided to leave interest rates at three per cent as a result of on-target inflation and below trend economic growth, both of which merited an accommodative stance in monetary policy.

According to RBA Governor Glenn Stevens, global growth is likely to remain at below average levels with Europe still in recession and financial markets still at risk. However, downside risks are reduced, supported by a moderate expansion in the United States and stabilising growth in China and Asia.

In Australia, increased capital spending in the resources sector, housing investment growth and some strengthening in private consumption levels have contributed to close to trend growth in 2012. Despite this, the RBA believes two-speed conditions and a peak in resources investment will provide "more scope for some other areas of demand to strengthen". Public spending is also expected to be constrained.

The effects of monetary policy decisions made in late 2011 and 2012 are now also apparent in the economy, with Mr Stevens citing an "expansionary effect" that is expected to continue over time.

View the full monetary policy decision here.

Connect with us to receive updates throughout the day:

Like us on Facebok Follow us on Twitter

Dun and Bradstreet AustraliaTop of page Dun & Bradstreet Australia Pty Ltd 2015 | D&B Small Business    *About Us    *Sitemap    *Advertise    *Privacy    *Terms & Conditions