At its meeting today, the Board of the Reserve Bank of Australia (RBA) decided to leave the cash rate unchanged at 1.5%.
The Australian dollar was trading around 75.44 US cents after the RBA made its cash rate announcement at 2:30 p.m. (Sydney/Melbourne time), compared with 75.33 US cents earlier in the day.
An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast, the RBA has said.
The Australian economy grew by 2.4% over 2017 and the RBA's central forecast for the Australian economy remains for growth to pick up, to average a bit above 3% in 2018 and 2019, this month’s statement said.
Rates steady since August 2016
The last time the cash rate changed was the 0.25 percentage points cut to 1.5% in August 2016.
Before the announcement today, there was a 0% expectation of an increase to 1.75%, according to the RBA Rate Indicator on the Australian Securities Exchange (ASX) website.
The indicator calculates a percentage probability of an RBA interest rate change based on the market determined prices in the ASX 30 Day Interbank Cash Rate Futures.