Australia leaves rates on hold at 3.25%



AGENCE FRANCE PRESSE

Published — Tuesday 6 November 2012

Last update 6 November 2012 11:27 pm

| نسخة PDF Print News | A A

SYDNEY: Australia's central bank yesterday unexpectedly held its official interest rate steady at 3.25 percent, saying that recent indications on the world economy were more positive.
The Reserve Bank of Australia last month sliced 25 basis points off the cash rate, taking it to lows not seen since October 2009 when it first resumed hiking rates following the global downturn.
Economists had widely tipped a further 25 basis point cut, but central bank Gov. Glenn Stevens said the RBA "judged that the stance of monetary policy was appropriate for the time being".
Stevens said while commodity prices were lower and employment was softening, growth has been running close to trend over the past year in mining-powered Australia and inflation was in the RBA's preferred 2-3 percent zone.
"Looking ahead, the peak in resource investment is likely to occur next year, at a lower level than expected six months ago," he said.
"As this peak approaches, the board will be monitoring the strength of other components of demand."
The Aussie dollar rose above 104 US cents on the decision, while the share market closed up 0.24 percent at 4,484.8 points.
Stevens said global growth was forecast to be a little below average for a time, and risks to the outlook were on the downside, largely as a result of euro zone woes. But he said risks elsewhere "seem more balanced".
"The United States is recording moderate growth, while recent data from China suggest growth there has stabilized," he said.
Australia was one of the first developed economies to begin raising rates after the global financial crisis rattled markets worldwide, first lifting them in October 2009.
It began pulling back again in November 2011 when the central bank slashed the cash rate for the first time in more than two years to bring it down to 4.50 percent. The rate has been declining ever since.
Finance Minister Penny Wong said Australia stood out against its peers when it came to a strong economy, and mortgage-holders had benefited from a total cut of 150 basis points in the past year.
"We've got solid growth, low unemployment and low interest rates," she said.
The decision to keep rates on hold, which breaks a six-year trend of changing the cash rate on the same day as the nation's most famous horse race, the Melbourne Cup, was questioned by retailers.
"We believe there is still time for the RBA to deliver a Christmas gift to business owners, workers and consumers, by cutting rates in December," National Retail Association Chief Executive Trevor Evans said.
But Stevens said the impact of earlier decisions were still filtering into the economy and the RBA would be monitoring the situation carefully.
"Interest rates for borrowers have declined to be clearly below their medium-term averages and savers are facing increased incentives to look for assets with higher returns," he said in his statement.
"Further effects of actions already taken to ease monetary policy can be expected over time."

What's happening around Saudi Arabia

RIYADH: In a fresh boost for relations between Saudi Arabia and Bangladesh, the Kingdom has decided to sign a memorandum of understanding on Foreign Office Consultations (FOC) with Dhaka. The Kingdom endorsed a proposal in this regard at a meeting be...
The Indonesian mission is hopeful detained Indonesian pilgrims will be free “very soon.” The mission is trying to persuade Saudi authorities of their nationals’ innocence.Eleven Indonesian pilgrims, who arrived in the holy city of Makkah to perform U...
JEDDAH: Police at King Khaled International Airport in Riyadh arrested a Saudi hacker after a government organization in Al-Leith in Makkah complained that he had hacked its website, according to an online newspaper.Col. Atti Al-Qurashi, spokesman fo...
JEDDAH: The special criminal court has sentenced a former military official to nine years in jail for joining Daesh and traveling to Syria to fight.A fine of SR5,000 was also slapped on him and he was barred from traveling abroad for nine years after...
JEDDAH: Saudi-Indian ties have reached a new high with the arrival of an Indian Air Force (IAF) flying contingent at the King Fahd Air Base in Taif.The mission, comprising more than 100 high-ranking IAF officers and airmen onboard Sukhoi MKI fighter...
RIYADH: A tripartite agreement among the National Handicraft Program, Prisons Department and the Technical and Vocational Training Corp. (TVTC) was recently signed in the presence of Prince Sultan bin Salman, president of the Saudi Commission for Tou...
JEDDAH: British authorities have opened investigations into the plane crash that led to the death of three members of the Binladin family.Investigations depend on the black box which registers the entire plane’s data, including speed, position of mob...
JAZAN: In a tragic accident, a speeding fuel truck caused four deaths and injuries to many people when it collided head on with five cars on the northern entrance of Abu Areesh area of Jazan, according to a website.The truck deviated from its path an...
JEDDAH: Municipal and Rural Affairs Minister Abdul Lateef Al-Asheikh has directed all the municipal authorities to closely scrutinize the election candidates’ credentials to thwart violation of rules.This is to ensure that the candidates meet all the...
Mohammed Mokammel Hossain, labor consul, Bangladesh Consulate, Jeddah * Which particular aspect of Saudi Arabia you like the most? Two Holy Mosques in Makkah and Madinah.* Can you tell us your favorite and oft-repeated Arabic word? Insha’Allah. * W...
RIYADH: Expatriates feel Saudi Arabia is a safer place than their home countries despite the fact that the Kingdom is leading a war against the Yemeni rebels and other terror organizations and a couple of suicide attacks in the recent past. Mahmoud T...
RIYADH: The maximum medical policy or contract for visitors is SR100,000, which covers expenses on emergency treatment, maternity charges, traffic accident injuries, dialysis and medical treatment in or outside the Kingdom. Making the above announce...
JEDDAH: The city and its surrounding areas sweltered on Monday, with the maximum temperature rising to 44 degree Celsius and relative humidity being recorded at 85 percent. The weather department has forecast a similar situation in Jeddah on Tuesday....
JEDDAH: A National Academy for Energy in Dammam and a private technical technical college, both exclusively for women, will be opened in the Easter Province.The General Organization of Technical and Vocational Training is in the process of implementi...
AL-AHSA: Masjid Joatha or Joatha Mosque is a center of attraction in Al-Ahsa with many visitors and tourists thronging the place of worship, which was believed to have been built in the seventh year of Hijri (629 AD).The mosque has been restored as p...

Stay Connected

Facebook