Australia held its official interest rate steady at 4.5% for a third month in a row in a welcome reprieve for Prime Minister Julia Gillard as she campaigns for re-election on a strong economy.
The Reserve Bank of Australia cited volatile global conditions for its decision to keep the cash rate on hold ahead of August 21 elections.
'With growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the Board judged this setting of monetary policy to be appropriate,' Governor Glenn Stevens said.
'The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade,' he added.
It is the third pause in a row since Australia - the only advanced economy to avoid recession during the global crisis - broke away from advanced-economy peers and resumed lifting rates last October.
Despite the RBA's caution, the central bank governor noted that Asia and Latin America were powering ahead. Asia's appetite for raw materials has been key to Australia's recent economic success.
Domestically, Stevens said rallying commodity prices would help offset the withdrawal of tens of billions of dollars in stimulus, as evidence points to rising consumption and business spending.
In addition, caution on financial markets has 'abated of late, helped by the disclosure of information about European banks,' Stevens noted.
'Nonetheless, the global outlook remains somewhat more uncertain than a few months ago and this is reflected in the volatility of financial prices,' he added.
