RBA holds rates at 4.75 per cent

The Reserve Bank of Australia (RBA) announced yesterday (April 5th) that the cash rate would remain at 4.75 per cent.

It was not an unexpected decision, with the overwhelming majority of economists forecasting that this would be the decision.

In a statement released by the RBA, it asserted that the natural disasters over the summer had an adverse effect on output and the mining industry.

While it noted that production losses in the agricultural sector have led to an increase in the cost of some goods, the RBA suggested that "looking through these temporary effects", inflation would continue to follow the two to three per cent target set by the financial institution.

Unemployment remained at five per cent, although moderate growth in employment is expected in the near future, the bank stated.

Over the last five years, the cash rate reached its peak in March 2008, when the RBA pushed it up to 7.25 per cent.

The largest drop was in the final quarter of that year, when it fell 2.75 percentage points.

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