Interest Rates on Hold in Australia February

No Increase - RBA Leaves Interest Rates on Hold In February - Cash Rate Stays at 3.75% - But Warns of Rises to Come

The Reserve Bank of Australia has defied the predictions of most economic commentators by leaving Interest Rates on hold in February.

The RBA has considered that previous hikes by banks on top of the official movement to the cash rate may have been enough to keep the economy in check for now. The RBA is therefore waiting to see what impact their previous three rises had on the Australian economy.

However, the RBA issued a warning that there are more interest rate rises to come, suggesting that "Interest rates to most borrowers nonetheless remain lower than average" and if "economic conditions evolve broadly as expected, the Board considers it likely that monetary policy will...need to be adjusted further in order to ensure that inflation remains consistent with the target..."

In a statement released on Tuesday afternoon, Reserve Bank Governor Glenn Stevens said that "With the risk of serious economic contraction in Australia having passed, the Board had moved at recent meetings to lessen the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker, he said

"Lenders have generally raised rates a little more than the cash rate over recent months and most loan rates have risen by close to a percentage point. Since information about the early impact of those changes is still limited, the Board judged it appropriate to hold a steady setting of monetary policy for the time being."