The Reserve Bank has kept interest rates at 3 per cent for the second month in a row at its March board meeting today.
A majority of economists had expected the RBA to stay its hand, with the markets pricing in an 11 per cent chance the central bank would reduce the cash rate.
The Reserve Bank’s decision came after a raft of economic data released this morning pointed to the suggestion that there were early signs the 50 basis points of cuts in October and December were filtering through to the economy.
Retail sales rose by 0.9 per cent for the month of January, surpassing economists’ expectations, following three consecutive months of falls.
At the same time, the current account deficit narrowed and there was an increase in government spending for the fourth quarter of 2012.