The Reserve Bank Of Australia (RBA) has announced interest rates will be remain on hold at record lows.
The RBA board was widely tipped to leave rates unchanged at 2 per cent and did so on Tuesday afternoon.
RBA Governor Glenn Stevens attributed the decision to good global financial conditions but also noted falling commodity prices.
“Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low,” Mr Stevens said in a statement after the announcement.
News of the decision saw the Australian dollar rise a quarter of a US cent to 73.24, up from 72.96.
Mr Stevens was upbeat about the economy’s performance so far this year.
“In Australia, the available information suggests that the economy has continued to grow,” he said.
“While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year.”
An expected interest rate hike by the US Federal Reserve later this year will also help the Australia economy, Mr Stevens said.
A Fed rate hike will boost the US dollar and push the Australian dollar even lower, making locally produced goods more competitive with imports.
The RBA’s broader economic outlook will be released in its quarterly monetary policy statement on Friday.
– with AAP