Cash rate kept at 4.75 per cent by Reserve Bank of Australia

The Reserve Bank of Australia (RBA) has announced that the cash rate will remain at 4.75 per cent for the 12th consecutive month.

A statement by the governor of the bank Glenn Stevens suggested that "the path for inflation" may be more in line with the target of between two and three per cent for 2012 and 2013

In making its decision, the board observed that financial conditions in Australia have eased recently, as interest rates for housing and other loans have declined slightly.

This was attributed to an increase in competition and a decline in the cost of funding in some financial markets.

The RBA noted that global financial markets remain unsettled and that there are still high levels of uncertainty surrounding Europe's sovereign debt issues.

Over the last week, both Westpac and the Australian Chamber of Commerce and Industry called on the central bank to reduce interest rates.

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