The Reserve Bank has decided to keep the interest rates steady in today's meeting, leaving the cash rate at 3.00%. The RBA acknowledged that the global economic situation remains gloomy but there is not enough downside risk to warrant a drop in interest rates. Commodity prices have steadies and borrowing conditions are good for businesses. Share prices have been hitting highs for the past two weeks.
The inflation rate stayed around 2.25% but with a slowing job market, the RBA believes this will stay under control. Also, recent news about the housing markets improving in January would have contributed to the RBA's decision not to drop the cash rate unnecessarily.
The Aussie dollar hardly reacted to the news, staying at around $US1.04.
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