8 Feb 2012

Interest rates held by RBA

5:25 am on 8 February 2012

The Reserve Bank of Australia left interest rates unchanged at its first board meeting of the year, keeping the official cash rate at 4.25%.

In a statement, Governor Glenn Stevens said progress had been made to ease the "acute financial pressures" on banks in Europe late last year and the mood on financial markets had since improved.

He pointed to signs of moderate growth in the United States economy as well as "robust" indicators of growth in China in the second half of last year.

Mr Stevens said expansion in the Australian economy was close to trend, although the Australian dollar had appreciated more than the bank had expected.

Federal Treasurer Wayne Swan said the decision recognised the strength of the Australian economy.

The ABC reports the Australian dollar soared after the announcement.

At 3pm (AEDT) it was buying 107.8 US cents, 82.7 Japanese yen, 82.3 euro cents, 68.2 British pence and $NZ1.29.

The RBA board next meets on 6 March.