In a statement released by RBA governor Glenn Stevens, he said the board decided to keep the official interest rate at 4.5% due to concerns over economic recovery.
“Since the Board last met, concerns about sovereign creditworthiness in several European countries have been a focus of financial markets. Investors have generally displayed a good deal more caution.”
“As a result, equity prices have fallen and long-term government bond rates have declined outside of the countries most affected by the sovereign concerns. The Australian dollar fell sharply as part of this adjustment. Commodity prices have also softened, though those important for Australia remain at very high levels.”
Additionally, Stevens said the effects of these factors on the economy will need to remain under review, and that global growth is still expected to be at about trend pace in 2010.
This could indicate another pause next month.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
