The Reserve Bank has opted to keep official interest rates on hold today, citing below trend economic growth and an expected further rise in unemployment as factors behind its decision.
The monetary policy setters said information on the global economy was indicating that there were “reasonable prospects of a pick-up this year”.
The RBA was weighing up higher-than-expected inflation figures from December and a weaker labour market, but on balance decided to stay on the policy-setting sidelines.
“Monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates,” the RBA said in a statement.
It also said a lower Australian dollar if sustained, would assist in achieving balanced growth in the economy.
The central bank retained its accommodative stance on monetary policy, meaning it hasn’t ruled out further rate cuts this year should conditions warrant them.
Rates have been on hold at a record low of 2.5 per cent since August last year.