RBA keeps official interest rates on hold at 2.5%

The Reserve Bank of Australia ( RBA) has announced on Tuesday that they left official interest rates on hold at 2.5 percent, which means the current level of 2.5 percent will keep at this level for the eighth straight month. In announcing the decision Tuesday, RBA Governor Glenn Stevens again emphasized interest rates were likely to remain on hold for some time. "On present indications, the most prudent course is likely to be a period of stability in interest rates," he said. The Australian dollar initially jumped on the rates decision, briefly reaching a four-month high of just over 93 U.S. cents, but had eased back to 92.65 cents by 3:28 p.m. Australian Eastern Standard Time once traders digested the RBA governor's statement, where Glenn Stevens again described the currency as "high by historical standards." "The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months," he said. He also indicated that inflation was likely to be consistent with the RBA's target range of between 2-3 percent for the next two years. In addition, credit growth was picking up and home prices had increased significantly in the past year, while the unemployment rate had continued to edge higher, said Glenn Stevens.