Australia’s central bank reiterated that it’s likely to maintain a period of record-low interest rates and renewed a reference to the currency’s strength.
Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5 percent, saying in a statement that housing prices “have increased significantly” and the Aussie “remains high by historical standards.” The Reserve Bank of Australia’s pause was predicted by all 32 economists surveyed.
After 2.25 percentage points of rate cuts from late 2011 through August, the RBA is reluctant to add stimulus to the economy as Sydney house prices surge. Markets and economists predict Stevens will leave rates unchanged at a record-low this year to avoid a growth gap as mining companies plan fewer projects amid slowing Chinese growth, weakening the job market.
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