Australia leaves rates on hold
SYDNEY, Australia (CNN) -- Australia's central bank has left its benchmark interest rate unchanged at 5.25 percent for the fifth straight month.
That follows figures last week showing inflation is running at just 2.0 percent, and more signs emerge that a property boom in Australia is slowing.
The decision, announced by the Reserve Bank of Australia on its Web site Wednesday morning, was widely expected.
Before the decision, HSBC chief economist John Edwards said a rate rise was "nearly impossible" ahead of Federal Treasurer Peter Costello releasing the 2004-05 national budget next week.
Most economists now expect the central bank will lift rates by a quarter of a percentage point in June or July, ahead of a federal election in the second half of 2004.
The central bank last moved in December 2003, when it lifted rates by a quarter of a percentage point to 5.25 percent. It was its second monthly move to help cool a long-running housing boom.
The Australian share market has eased from record levels seen last month and the Australian dollar also has slipped from a record high of 80.0 U.S. cents touched on February 18 this year. It it is trading at about 73 U.S. cents Wednesday.
A recent fall in auction clearance rates and in property lending approvals confirm that capital city property investment is slowing, but consumer confidence in the Australian economy remains high.
The economy grew 3.3 percent in 2003 and is running at about a 4 percent rate so far this year.
According to the Reserve Bank, the inflation rate, measured by the consumer price index, was 2.4 percent in 2003 but eased to 2.0 percent in the March 2004 quarter. That is the bottom of the bank's target range.