Australia's central bank left interest rates on hold at 4.75% today, as the euro zone debt crisis and US growth fears stoke uncertainty about the global economy. The Reserve Bank of Australia last raised its rate in November 2010.
"At today's meeting the Board judged the current cash rate remained appropriate," governor Glenn Stevens said. "As always, the Board will continue to assess carefully the evolving outlook for growth and inflation," he added.
Stevens said conditions in global financial markets were very unsettled, with uncertainty increasing about the outcome of sovereign debt and banking problems in Europe, as well as global economic growth.
Soft economic conditions in Europe and the US were likely to persist while the overall uncertainty had reduced confidence, he said. He said that indications so far show that economic activity is continuing to expand in China and most of Asia.
"Nonetheless, recent events have led forecasters to reduce their estimates for global GDP growth, which is now expected to be about average this year and next,'' he cautioned.
Stevens said while the bank had been concerned about the prospect of rising inflation in Australia, recently revised data showed the pick-up in prices was less steep than expected.
