rba goes bang... 4.25%

I personally think the RBA is just sick of all the pathetic pleas from industry groups and real estate types.

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The Reserve Bank has left its key interest rate on hold, dashing the hopes of borrowers for a pre-Easter boost to family or business finances.

The central bank’s decision to leave its cash rate unchanged at 4.25 per cent for a third consecutive meeting was widely tipped by economists.

Attention is now likely to shift to the RBA’s next meeting on May 1 with markets tipping the bank will cut rates just a week before the federal budget.

Advertisement: Story continues below The ANZ bank will also hold its regular monthly meeting to set its interest rates on Friday next week, with borrowers waiting to see if the bank again breaks ranks with the RBA to raise rates on its own.

Change in stance


In today's statement, the RBA offered clear hints that another rate cut could be on the agenda. The board said that "were demand conditions to weaken materially, the inflation outlook would provide scope for easier monetary policy."

"At today's meeting, the Board judged the pace of output growth to be somewhat lower than earlier estimated, but also thought it prudent to see forthcoming key data on prices to reassess its outlook for inflation, before considering a further step to ease monetary policy," the statement said.

Despite the RBA decision to leave rates on hold today, there’s gathering evidence of weakness in the Australian economy outside the mining industry. Retail sales growth figures for March showed subdued consumer spending, building approvals in February fell more than 7 per cent and inflation remains subdued.

Yesterday the TD Securities–Melbourne Institute monthly inflation gauge rose 1.8 per cent in the year to March, slowing from the 2 per cent pace in the year to February, in the lowest reading since October 2009.



Read more: http://www.theage.com.au/business/rba-leaves-interest-rates-steady-20120403-1wa4n.html#ixzz1qww2i5bs"