BREAKING NEWS: RBA keeps rates on hold at 4.75%

The Reserve Bank of Australia decided to keep the official interest rate on hold at 4.75% this afternoon, in line with economists’ expectations.

The decision comes after a suite of poor profit results from major listed companies, especially in the retail sector where businesses are suffering from the impact of natural disasters and frugal customers.

Economists largely expected the RBA to remain on hold until the second half of the year, when an uptick in construction and retail is forecast.

“There is not a lot that the Reserve Bank can do about changes at the petrol bowser or the floods in Queensland,” CommSec chief economist Craig James said this morning.

“If underlying inflationary pressures remain contained, then the Reserve Bank can stay on the sidelines until well into 2011.”