 RBA leaves rates unchanged
The Reserve Bank of Australia has left the official cash rate on hold at today's monthly interest rate decision.
The cash rate remains at a 49-year low of 3 per cent, as expected by most economists.
Today's announcement comes just one week before the next Federal Budget.
Experts had predicted that board members would take a wait-and-see approach in order to fully consider recent economic data and the effects of the government stimulus packages.
Governor Glenn Stevens said last month he is confident that the stimulus measures, a strong banking system and a pickup in China will drive a rebound.
In a statement released after the announcement, Mr Stevens said conditions in global financial markets remain generally "on a path of gradual improvement".
"The considerable economic policy stimulus in train in most countries should help contain the downturn and support an eventual recovery," Mr Stevens said.
Macquarie Group interest rate strategist Rory Robertson believes that the Reserve Bank (RBA) is biding its time and being cautious before making any further cuts.
"It [the RBA] will be under pressure to cut rates at each meeting for the rest of the year and I think by the end of the year, we will see the cash rate cut from the current 3 per cent all the way down to 2 per cent and perhaps less later on."
"The fact that the Australian economy is in recession and the fact that unemployment is rising and full-time employment is falling is something that will keep pressure on the Reserve Bank to cut further as time passes," Mr Robertson concluded.
The central bank cut rates by a quarter of a percentage point last month, but the big banks failed to pass on the reduction in full.
Rates have fallen by 4.25 percentage points since September last year.
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