Australian borrowers will have to wait for at least another month for more interest rate relief after the Reserve Bank surprised pundits by leaving its key rate unchanged.
The Reserve Bank today kept its cash rate at 4.25 per cent, defying expectations of a third rate cut in a row.
The dollar surged on the news, jumping about two-thirds of a US cent to $US1.077 within seconds of the announcement.
The central bank took heart from recent signs that the US economy is picking up growth and receding concerns about the European debt crisis.
The RBA’s decision may take the heat off the country’s major banks - at least for now. Several of the banks had indicated that they may not pass on another rate cut by the central bank because their own borrowing costs continue to rise.
Most economists had predicted the RBA would slice another 25 basis points off the cash rate today. The consensus may now focus on the central bank’s March meeting for that cut to take place.
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