Interest rates hold steady
THE Reserve Bank of Australia has left interest rates at a standstill for the seventh month in a row.Interest rates have been steady at 4.75 per cent since the RBA lifted the rates by 25 basis points last November.In a statement released Tuesday afternoon, Reserve Bank governor Glenn Stevens said Australia’s terms of trade were reaching very high levels and national income was growing strongly.
He said the natural disasters over summer had reduced output in some key sectors which resulted in a sharp decline in GDP in the March quarter.
‘‘The resumption of coal production in flooded mines is taking longer than initially expected,’’ Mr Stevens said.
‘‘But production levels are now increasing again and there will be a mild boost to demand from the broader rebuilding efforts as they get under way.’’ Mr Stevens said weather-affected prices should fall back later in the year, though substantial rises in utility prices would still occur.
The RBA board said the current mildly restrictive stance of monetary policy remained appropriate.