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Interest rates remain on hold

Interest rates remained on hold this morning with the benchmark rate staying at 6.25 per cent. The central bank last lifted the cash rate in November by 25 basis points.

“At its meeting on 5 June, the Reserve Bank board decided to leave the cash rate target unchanged at 6.25 per cent,” the RBA said in a statement.

Economists were unanimous in their expectation that interest rates would remain unchanged following yesterday’s board meeting. But economists say a strengthening economy and a tight labour market does pose the risk an interest rate rise toward the end of the year or in early 2008.

The RBA does not release a formal statement on its policy reasoning when leaving interest rates unchanged, but central bank Governor Glenn Stevens will have an opportunity to express his view on the outlook when he addresses a business lunch in Brisbane on June 14.

The Australian Bureau of Statistics will release the first quarter national accounts later this morning and is expected to report that economic growth accelerated in the first three months of the year. More…

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