8 Jun 2011

Australia interest rate decision widely expected

8:28 am on 8 June 2011

The Reserve Bank of Australia (RBA) kept official interest rates on hold for the seventh straight month as recent economic data showed many areas of the economy are struggling.

The RBA's cash rate remains at 4.75%, as it has done since a Melbourne Cup Day rate rise in November.

The decision on Tuesday to keep rates on hold was widely expected by economists.

A statement by Reserve Bank of Australia governor Glenn Stevens noted some strength in parts of the economy, including household demand for goods and services, despite the fall in GDP due to the effect of the country's floods.

Most economists are expecting the Reserve Bank to lift the official cash rate before the end of winter, as an expected surge in mining investment puts upward pressure on inflation.