Moving in line with forecasts the Reserve Bank of Australia (RBA) has kept the nation’s official interest rate on hold at 3.5 per cent at its August board meeting.
It is the second straight month interest rates have been maintained at 3.5 per cent after two months of rate cuts in June and May. The current rate of 3.5 per cent sits at lowest level since November 2009 and comes amid concerns for sagging global and domestic growth.
The RBA’s Governor Glen Stevens maintains optimism about the Australian economy. In a speech titled "The Lucky Country" Mr Stevens said last month, "It is slowly becoming better recognised that the Australian economy's relative performance against a very turbulent international background has been remarkably good."
Mr Stevens also commented after the speech that the central bank believes monetary policy settings are “about right for circumstances that we are in”, adding that Australia has an unemployment rate in the low fives, strong banks, a sound currency and government finances in reasonable shape.
Many analysts have predicted rates will drop by at least 25 basis points one more time in 2012.
