Australian, Indian central banks hold fire on interest rates

Australia and India’s central banks have held interest rates at their previous levels following the conclusion of their respective monetary policy meetings on Tuesday.

The Reserve Bank of Australia (RBA) held its headline interest rate at 2.25% for the second month in a row, despite local anticipation of a cut as the country attempts to boost its economy.

RBA’s last cut in February was the central bank’s first in 18 months, reducing the benchmark interest rate to record lows last seen in the 1960s. Analysts still expect the RBA to cut the rate further, quite possibly, at its next policy meeting on 4 May.

However, governor Glenn Stevens said: “We judged that it was appropriate to hold interest 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. We will continue to assess the case for such action at forthcoming meetings."

Meanwhile, the Reserve Bank of India (RBI) also decided to leave the country’s interest rates unchanged at 7.5% when it met for a bi-monthly review of monetary policy. It comes after the RBI enforced two emergency rate cuts earlier this year of 0.25% each.

In its monetary policy statement, the RBI said that it would prefer to stay put following recent signs of a pick-up in economic activity and comfortable liquidity conditions, as it awaits further data on inflation and possible US Federal Reserve’s moves on interest rates.