2 Jun 2009

Australia's central bank leaves rates unchanged

9:56 pm on 2 June 2009

The Reserve Bank of Australia has left rates unchanged for a second consecutive month on Tuesday, in another sign it is confident the worst of the global downturn has passed.

The cash rate stands at a 49-year low of 3%, down from 7.25% in June last year.

But the central bank has left the door open to future rate cuts, the ABC reports.

Although the major banks have not passed on all of the RBA's cuts, mortgage rates are at their lowest level in decades.

The RBA has decided to leave rates on hold amid growing evidence the global economy is not deteriorating further, and that the Australian economy is holding up surprisingly well.

In fact, the latest official figures have undermined fears tomorrow's National Accounts will show the economy is officially in recession.

Most economists are forecasting that gross domestic product fell by 0.2% in the March quarter, after a big fall of 0.5% in the December quarter.