AFP, SYDNEY, April 5: Australia's central bank kept interest rates unchanged at 4.75 per cent Tuesday, in line with expectations, saying inflation was likely to stay within target.
The Reserve Bank of Australia last hiked the cash rate in November 2010 in a pre-emptive move against inflation amid the threat of rising commodity prices and a tightening labour market.
'At today's meeting, the Board judged that the current mildly restrictive stance of monetary policy remained appropriate in view of the general macroeconomic outlook,' said Reserve Bank of Australia governor Glenn Stevens.
'Inflation is consistent with the medium-term objective of monetary policy, having declined significantly from its peak in 2008.
'These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices.'
He added that production losses due to floods in Queensland in January were temporarily raising prices for some agricultural produce, which will boost the March quarter consumer price index.
'But these prices should fall back later in the year. Overall, looking through these temporary effects, the Bank expects that inflation over the year ahead will continue to be consistent with the 2-3 per cent target.'
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