Tuesday July 7, 07:13 AM
Australian rates on hold, upbeat on global economy
SYDNEY (AFP) - Australia's central bank has left interest rates on hold at a 49-year low of 3.0 percent in an upbeat assessment of the global economy.
The Reserve Bank of Australia (RBA), which has slashed rates from 7.25 percent since September, kept the cash rate unchanged for the third straight month.
"The global economy is stabilising, after a sharp contraction in demand during the December and March quarters," governor Glenn Stevens said in a statement.
"Downside risks to the outlook have diminished, with conditions in global financial markets improving this year and action to strengthen balance sheets of key financial institutions under way."
Stevens added that growth in key market China had "strengthened considerably" and that Australia's slump had not been as deep as originally feared.
But he left the door open for further rate cuts, cautioning that credit conditions remained tight and the international outlook was mixed.
"The (Reserve Bank) Board's current view is that the outlook for inflation allows some scope for further easing of monetary policy, if needed," he said.
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