Australia Keeps Interest Rate Unchanged at 6.75%

Australia's central bank left its benchmark interest rate unchanged as it waits to see if the U.S. housing recession and credit-market turmoil will hurt growth.

Governor Glenn Stevens and his board left the overnight cash rate target at an 11-year high of 6.75 percent in Sydney today, as forecast by all 27 economists surveyed by Bloomberg News. The rate was raised last month and in August.

Australia has so far weathered the U.S. slowdown and financial-market ructions as consumer spending increases and exporters sell more to China and Europe. Accelerating inflation, driven by the lowest jobless rate in 33 years and rising wages, may force the central bank to raise borrowing costs in the first quarter of next year.

Australia's dollar fell to 87.04 U.S. cents at 9:38 a.m. in Sydney from 87.40 cents before the decision was announced. The yield on the 10-year government bond fell 1 basis point to 6 percent. A basis point is 0.01 percentage point.

Australia Keeps Interest Rate Unchanged at 6.75%

12/4/2007 3:50:02 PM