Sydney: The Reserve Bank of Australia (RBA) announced Tuesday its decision to leave the cash rate unchanged at 4.25 per cent following its February board meeting.
The decision surprised the market as economists expected a quarter of a percentage point rate cut, reported Xinhua.
RBA Governor Glenn Stevens said in a statement that the acute financial pressures on banks in Europe were alleviated considerably late in 2011 by the actions of policymakers.
“Much remains to be done to put European sovereigns and banks on a sound footing, but some progress has been made,” Stevens said.
“Information on the Australian economy continues to suggest growth close to trend, with differences between sectors,” he said.
The governor said the Board noted that interest rates for borrowers had declined to be close to their medium-term average since the RBA moved to cut rates in November and December.
“With growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment,” Stevens said.