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Australia - The Reserve Bank of Australia left a key interest rate unchanged on Wednesday amid deepening uncertainty about global financial markets and rising wholesale borrowing rates in Australia.
The central bank left the official cash rate at 6.75%, a move widely expected by economists.
But in an unprecedented move, the bank published a statement explaining why it left interest rates on hold and also released minutes from its Tuesday board meeting. The changes come after talks between Reserve Bank Governor Glenn Stevens and new Treasurer Wayne Swan last week.
"The board remains concerned about the outlook for inflation," the statement said.
"But given the heightened uncertainty about the international outlook and the local trends in wholesale borrowing costs, both of which could have a bearing on inflation over the medium term, it judged that the current stance of monetary policy should be maintained for the time being," it added.
The bank said in November that core inflation could head above its 2-3% target band in 2008, but the statement suggests interest rates could remain on hold while global market instability plays out.
Interest rates have been hiked 10 times since mid-2002 and are an 11-year high after being hiked in November and August. All eyes are now on the bank's February policy meeting, its first in 2008, which will take into consideration fourth quarter inflation data due January 23.
- AP