The Reserve Bank of Australia has met expectations, leaving interest rates unchanged at the record-low of 2.5%.
Analysts predicted the rate would stay steady, although many still believe there is scope for further cuts before the New Year.
Announcing the RBA’s decision, governor Glenn Stevens said the board would continue to assess the economic outlook and adjust its policy accordingly, “as needed to foster sustainable growth in demand and inflation outcomes consistent with the target”.
The announcement follows positive economic news in the past few days with retail sales lifting more than expected in September, according to the Australia Bureau of Statistics, the manufacturing sector showing a slight improvement and the services sector hitting a seven month high.
“There has been an improvement in indicators of household and business sentiment recently, but it is still too soon to judge how persistent this will be. Public spending is forecast to be quite weak,” Stevens says.
“The Australian dollar, while below its level earlier in the year, is still uncomfortably high. A lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy.”