Interest rates to stay the same, RBA confirms

Hopes that the Reserve Bank of Australia (RBA) would sanction further cuts to interest rates have been dashed, after governor Glenn Stevens confirmed the cash rate will stay at 4.25 per cent.

The RBA announced two consecutive reductions towards the end of 2011, but has stood firm so far this year, which has dismayed many home loan customers across the country.

Indeed, many lenders increased the rates attached to their mortgages as a direct response to previous RBA announcements in February and March.

Some trade unions and retailers had warned the RBA that action was needed to safeguard jobs, but Mr Stevens said that although economic growth has been slower than expected, there was still no need to force through more cuts.

However, the RBA chief did not rule out the possibility of more rate reductions in the near future.

"[The board] thought it prudent to see forthcoming key data on prices to reassess its outlook for inflation, before considering a further step to ease monetary policy," he remarked.

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