Australian interest rates remain at 3.25 percent

Even though the global economic outlook still remains weak, Australia’s central bank has left interest rates unchanged in an unexpected move so it remains at 3.25 percent.

The Reserve Bank of Australia governor, Glenn Stevens, has said that the economy was still in a strong position to ride out the downturn and by being in a stronger position than many of the other major economies, greater focus is going to be placed on stimulus measures to increase short term demand.

The government stimulus package has left the economy in a strong position, as interest rates have fallen by four percentage points between September and February.

Within the period, there have been a few signs of recovery as the goods, services and investment has fallen in Australia to AU$6.49 billion but retail sales have increased by 0.2 percent from December, even though economists had predicted a 0.5 percent drop.

Although the prevailing economic conditions are mainly weak, the combination of low mortgage and market rates, as well as the government stimulus measures which are worth more than AUS$50 billion, should provide a stable ground for the economy to build on.

Stevens has said that the rest of the world is also focusing on macroeconomic policy, the effects of which are yet to be seen.

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