21 Mar 2012

Australian central bank favours 'average' interest rate levels

7:40 am on 21 March 2012

The Reserve Bank of Australia says it is wise to keep interest rates at average levels while some sectors are sluggish and others booming.

Minutes from the bank's March meeting show policy makers are less worried about Europe's debt woes but if things take a turn for the worse, the bank may cut rates to keep inflation low.

The central bank left its official cash rate unchanged at 4.25% earlier in February.

The bank's minutes say weakness in manufacturing, building and retail is balanced by a strong mining and services sectors, so it is sensible for interest rates to be at average rates for now.