Australia’s central bank kept interest rates at a record low to spur an economy struggling for traction against a high currency and tumbling export prices.
Governor Glenn Stevens kept the overnight cash rate target at 2.5 percent for a 16th month, saying in a statement that “key commodity prices have declined significantly in recent months.” Today’s board decision was predicted by all 30 economists surveyed by Bloomberg News and markets had priced almost no chance of a move.
“The most prudent course is likely to be a period of stability in interest rates,” Stevens said, repeating comments from last month on rates and the currency. “The Australian dollar remains above most estimates of its fundamental value” and “a lower exchange rate is likely to be needed to achieve balanced growth in the economy,” he said.
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