Australian central bank holds cash rate at 0.1%
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The Reserve Bank of Australia (RBA) announced on Tuesday that it would not increase its 0.1 per cent cash rate despite pressures from rising inflation.
"Inflation has increased in Australia, but it remains lower than in many other countries; in underlying terms, inflation is 2.6 per cent and in headline terms it is 3.5 per cent," said RBA governor Philip Lowe in the monthly monetary policy update.
"Higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters."
Lowe and the bank have maintained that interest rates would not rise until Australia's rate of inflation was sustainably in the 2 per cent to 3 per cent range, reports Xinhua news agency.
While the cost of many goods such as petrol and other commodities and their downstream markets have lifted, wage growth in Australia has staggered.
Lowe said the bank would continue to monitor "inflation and the evolution of labour costs" over the coming months when deciding to raise rates above 0.1 per cent.
