RBA keeps interest rates at 3%

The Reserve Bank of Australia (RBA) decided to keep interest rates at three per cent again this month, encouraged by signs that the global economy is coming out of its tailspin.

In a statement yesterday (June 2nd), the RBA’s governor Glenn Stevens said that the world had responded effectively to the economic crisis and that signs of recovery were beginning to emerge, particularly in China and a few other major emerging countries.

He added that in Australia, the consecutive interest rate cuts made by the RBA and the extension of the first-home buyers grant had helped to ease credit conditions in the home loan market and pave the way for a recovery in house prices later in the year.

However, he said that business credit was still difficult to come by, with the effect of this yet to be measured.

"A pickup in housing credit demand suggests stronger dwelling activity is likely later in the year … Market and mortgage rates are at very low levels by historical standards," he insisted, which may encourage Aussies to compare home loans in order to benefit from the current conditions.

The decision to keep interest rates on hold had been broadly anticipated by analysts.

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