Australian central bank holds rates at 2.5% as mining boom unwinds
SYDNEY (AFP) - Australia's central bank held its cash rate steady at a record low of 2.5 per cent and hinted at a prolonged pause, saying a period of interest rate stability was prudent as the mining boom unwinds.
Reserve Bank of Australia (RBA) governor Glenn Stevens said the board decided to leave interest rates on hold for a fifth consecutive month, as expected by analysts.
Despite inflation coming in at a stronger-than-expected 0.8 per cent in the final three months of last year, indicating a pick-up in consumer spending, Mr Stevens said growth and labour market prospects remained shaky as Australia's decade-long Asia mining investment boom began to decline.
"Information becoming available over the summer suggests slightly firmer consumer demand and foreshadows a solid expansion in housing construction. Some indicators of business conditions and confidence have shown improvement," he said.