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Australia keeps rates on hold

Australia’s central bank shocked markets by skipping an interest rate rise yesterday, citing the impact of higher mortgage rates at home while noting tighter policy in China and concerns over sovereign debt abroad. The Reserve Bank of Australia’s decision to keep its key cash rate at 3.75 per cent confounded expectations of a rise to 4.0 per cent and hammered the local currency as investors slashed estimates for how high rates might go this year.