RBA leaves cash rate unchanged

Retailers will be breathing easier following the Reserve Bank’s decision today to leave the prime interest rate unchanged.

While analysts were predicting a slight increase in the official cash rate, RBA governor Glenn Stevens left the overnight cash rate target at 3.75%.

Bloomberg said the decision suggests Stevens and his board may keep borrowing costs unchanged in coming months to gauge the economic impact of previous increases.

Business confidence, particularly among retailing companies, fell in December to the lowest level in six months, a report showed today.

Stevens became the first central banker in the world to raise borrowing costs three times last year after Australia’s economy skirted the global recession, helped by $18 billion in cash handouts to consumers from the federal government.