Bloomberg News

Australia’s Central Bank Holds Benchmark Interest Rate at 4.75%

October 03, 2011

Oct. 4 (Bloomberg) -- Australia’s central bank held its benchmark interest rate for an 11th month as international financial turmoil threatens growth and a weakening currency boosts prospects for the nation’s manufacturers.

Governor Glenn Stevens left the overnight cash rate target at 4.75 percent, according to a statement released today in Sydney. The extended pause on borrowing costs matched the prediction of all 22 economists surveyed by Bloomberg News.

The Reserve Bank’s decision to maintain the developed world’s highest borrowing costs reflects a slower global economy that’s dimming the domestic growth outlook. Monthly employment growth averaged 2,800 from January through August, less than a 10th of the average of 30,500 in the first eight months of 2010.

The Australian dollar dropped 9.8 percent last month against the U.S. currency, the biggest monthly decline since October 2008, after the collapse of Lehman Brothers Holdings Inc. triggered a worldwide credit crunch.

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Brendan Murray at brmurray@bloomberg.net


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