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SYDNEY: Australia left interest rates on hold at 4.50 per cent for the fourth month on Tuesday, with the central bank saying inflation was close to its target and the global outlook uncertain.
The Reserve Bank of Australia (RBA) held its cash rate steady, in a move widely expected by economists, against the background of annual growth surging to 3.3 per cent and inflation resting at 3.1 per cent.
"With growth in the near term likely to be close to trend, inflation close to target and with the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate for the time being," bank governor Glenn Stevens said in a statement.
As Australians waited to know whether they would have a centre-left Labour or right-leaning coalition government after deadlocked August 21 polls, the bank said current lending rates were at average levels of the past decade.
Addressing the global economy, Stevens said that while economic growth was above trend to mid-2010, it would probably ease back over the coming year as growth in China moderated and prospects for Europe slowed.
"Financial markets are functioning more smoothly than they were a few months ago, though caution persists, with equity prices soft and yields on sovereign bonds issued by major countries reaching unusually low levels," Stevens said.
"Commodity prices are also off their peaks, though those most important for Australia remain at very high levels, and the terms of trade have regained their peak of two years ago."
-AFP/wk
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