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RBA kept interest rates unchanged

Reserve Bank of Australia in its monetary policy statement kept the cash rate unchanged at 2.5%. In Australia slightly firmer consumer demand and a sign of solid expansion in housing industry is seen. Business conditions and confidence have also shown some improvement. The Bank expects growth to remain below trend for a time and unemployment to rise further before it peaks. Beyond a short term, growth is expected to strengthen because of continued low interest rates and lower exchange rate. The exchange rate according to the bank has declined further which if sustained will assist in achieving balanced growth in the economy. Aussie went higher against USD after the RBA statement to its previous highs of 15 January. AUD also strengthened against NZD and JPY.