Surprise as RBA leaves rates on hold

AUSTRALIAN borrowers will have to wait for at least another month for more interest rate relief after the Reserve Bank surprised pundits by leaving its key rate unchanged.

The Reserve Bank today kept its cash rate at 4.25 per cent, defying expectations of a third rate cut in a row

The dollar rocketed on the news, jumping about one US cent to $US1.081 within minutes of the announcement.

"It's a pretty big surprise," said Market Economics managing director Stephen Koukoulas. "They were obviously very close to cutting interest rates and decided not to."

"They put a huge amount of weight on what's happening in the mining sector by the looks of this," he said. "So we'll see whether it's mining versus the rest of the economy - who wins out?"

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Topics:  reserve bank of australia

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