Reserve Bank keeps official interest rate at 4.5%

The Reserve Bank of Australia (RBA) opted to keep the official cash rate at 4.5 per cent for a second consecutive month today (July 6th), offering a reprieve for borrowers struggling with debt repayments.

In a statement accompanying the decision, RBA governor Glenn Stevens said: "The current setting of monetary policy is resulting in interest rates to borrowers around their average levels of the past decade.

"Pending further information about international and local conditions for demand and prices, the Reserve Bank board views this setting of monetary policy as appropriate."

The RBA’s decision to hold fire on rates had been widely predicted by analysts who pointed to the brewing European debt crisis as a factor in prompting caution within the central bank.

However, Citigroup managing director of investment and research analysis, Paul Brennan, noted that while the RBA statement had referred to the risks from offshore, it had also acknowledged the continued strength in the local economy.

He therefore told he felt any talk of the RBA cutting rates any time soon "is off the mark".

This article is brought to you by Mozo – Helping you compare interest ratesADNFCR-1761-ID-19876341-ADNFCR