Australia's c bank keeps rate at historic lows

Published: May 01, 2018 14:45:24 | Updated: May 02, 2018 12:45:44

The Reserve Bank of Australia (RBA) has kept interest rates at historic lows, predicting inflation would remain muted even as the economy gained speed this year.

The RBA left the benchmark rates at 1.5 per cent for a 21st successive month, the longest spell of inactivity since 1990, which surprised no one.

Analysts had thought it might rein in its optimism on the economy given a soft ending to last year. Instead, the central bank stood by forecasts that growth would “average a bit above 3.0 per cent in 2018 and 2019,” reports Reuters.

Annual gross domestic product (GDP) growth had slowed to 2.4 per cent in the December quarter as bad weather dampened activity and offset strength in consumer and government spending.

“The Bank’s central forecast for the Australian economy remains for growth to pick up,” said RBA Governor Philip Lowe after the bank’s May policy meeting.

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