The Reserve Bank of Australia (RBA) has held the official cash rate at three per cent.
At today's meeting, the Board judged that it was prudent to leave the cash rate unchanged, taking into account recent positive economic results, improving financial market sentiment, corporate borrowing conditions and a moderate growth in private consumption.
It was noted that while non-residential building is somewhat subdued, the general housing market is looking far more positive. A trend that is reflected in recent firmer auction clearance rates and further "indications of a prospective improvement in dwelling investment".
The RBA noted that while public spending is forecast to be constrained there has been some improvement in the resource export market.
The RBA also believes that inflation is also tracking to expectations, based on this analysis in today's statement. "Inflation is consistent with the medium-term target, with both headline CPI and underlying measures at around 2¼ per cent on the latest reading. Looking ahead, with the labour market softening somewhat and unemployment edging higher, conditions are working to contain pressure on labour costs."
Today's decision leaves the official cash rate of three per cent equal with the lowest rate experienced during the worst of the financial crisis in April 2009.
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