2 Feb 2010

Australian Reserve Bank holds interest rates steady

10:56 pm on 2 February 2010

In a surprise announcement, the Australian Reserve Bank has left official interest rates on hold at 3.75%.

Betting agency Centrebet had refused to open a book on the rates decision because it thought the outcome was too certain, the ABC reports.

In the lead-up to the central bank meeting on Tuesday, economists had been predicting that the official cash rate would rise by a quarter of a percentage point to 4%.

However, Reserve Bank governor Glen Stevens says interest rates will remain steady after three consecutive increases late last year.

In a statement, Mr Stevens says the global economy is growing, but expansion is likely to be modest in the major countries.

He says domestic economic conditions have been stronger than expected, but information about the impact of the previous rate rises is limited.

Mr Stevens says the Reserve Bank board considered it appropriate to hold rates steady for the time being.

The governor noted recent moves by Chinese authorities to reign in lending, and slow the country's economic growth rate to head-off inflation.