Australia holds rates at 3%
by Richard Kilner
Story link: Australia holds rates at 3%
The Reserve Bank of Australia has chosen to leave the interest rate unchanged at 3%.
The decision is made as the world continues to rise from recession, with China leading the way with strong growth.
In addition, the second quarter saw France, Germany and Japan all surface from recession and return to modest growth.
However, the Reserve Bank has warned that for any recovery to occur on a sustainable basis it is essential that financial institutions manage to restore their balance sheets after the damage done to them by the financial crisis.
The holding of rates in Australia comes after Israel last month increased rates by 25 basis points, one of the few occasions since the start of the financial crisis and consequent global recession that a major central bank has increased rates.