Rates on hold… for now

The Reserve Bank has left the door open to further interest rate cuts after keeping the cash rate on hold at 2.25 per cent at its March meeting.

RBA Governor Glenn Stevens said after the meeting that, having eased monetary policy in February, it was appropriate to hold rates steady for the time being.

“Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target,” he said.

“The RBA will further assess the case for such action at forthcoming meetings.

”Even without the cut the official cost of borrowing remains at record lows.

Economists are mostly expecting the RBA to move rates again in the coming months.

“A rate cut is a live option at every Reserve Bank Board meeting over the next few months,” CommSec’s chief economist, Craig James said. “It is a question or art rather than science when RBA Board members feel it is the right time to move.”