Rates on hold as inflation remains steady

The Reserve Bank of Australia has maintained the official cash rate at 3.5 per cent as the rate reductions of May and June continue to offset the increasing costs of living.

The official Inflation rate is currently sitting at 1.2 per cent, well below the RBA’s target range of two to three per cent.

The cost of living has remained fairly steady with reductions in interest rates covering increases in goods and services on the back of the introduction of the carbon tax on July 1.

The situation will give the RBA scope for further cuts in the future, although by how much and when will depend largely on the economic positions of China, Europe and the US.

For the RBA’s full rates decision visit http://www.rba.gov.au/media-releases/2012/mr-12-18.html