RBA opts to leave interest rate unchanged at 4.75%

It has not increased the base rate since November.

The Reserve Bank of Australia (RBA) has today (March 1st) opted to keep the interest rate at its 4.75 per cent level.

This news may please homeowners with a mortgage, particularly after the last time the RBA upped the base rate - in November - saw the Commonwealth Bank increase the levels on its home loans and savings accounts.

Announcing the monetary policy decision, RBA governor Glenn Stevens pointed out the Bank is expecting inflation to continue to be consistent with the target of between two and three per cent over the year ahead.

What's more, he stated it has "declined significantly" from its peak in 2008.

Mr Stevens added: "These moderate outcomes are being assisted by the high level of the exchange rate, the earlier decline in wages growth and strong competition in some key markets, which have worked to offset large rises in utilities prices.

"Production losses due to weather are temporarily raising prices for some agricultural produce, but these should fall back later in the year."

In addition to this, he pointed out Aussie credit growth - which includes products such as credit cards is fairly subdued, noting there has not been much of a change to asset values over the last few months.

This comes after Mr Stevens pointed out last month one reason why the RBA had opted to maintain the 4.75 per cent interest rate was because of the floods affecting the Queensland and Victoria areas.

He also stated inflation had played a part in keeping the cash level the same and noted within the next few years the efforts to repair or replace infrastructure lost during the natural disaster will add to the aggregate demand.

And therefore, Mr Stevens said it was important for the banks to assess whether this rebuilding work will impact largely on the medium-term outlook for inflation.