RBA maintains base rate

The Reserve Bank of Australia (RBA) has surprised analysts by maintaining the base rate at 4.25 per cent.

Many economists felt that a rate reduction was inevitable and the media had moved on to discussing whether or not lenders would pass on the rate cut in full to their customers.

However, the RBA defied analysts and has held the base rate, despite the fact that growth figures for Australia and the wider world are lacklustre.

The move will be good news for savings accounts holders, but less good for home loan customers.

Analysts think that Australia, while performing relatively well, will be keeping a close eye on international markets – particularly Europe, which is still in the midst of a major debt crisis.

Both the Australian Press Association and Bloomberg quizzed economists ahead of the RBA's decision, and both found overwhelming support for a February reduction in interest rates.

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