The Reserve Bank of Australia (RBA) left interest rates on hold at 3 percent as predicted. 
A survey by AAP had expected the RBA to leave the cash rate at the lowest since 1960.
Treasurer Wayne Swan said last weekend that it was obvious that rates will rise, while Minister for Financial Services, Chris Bowen, warned yesterday that rates can’t stay low forever.
Some economists believe the first rate rise could come this year, but the general view is that rates will remain on hold until the middle of next year.
In a statement released after the announcement, governor Glenn Stevens said the risk of “severe contraction” in the Australian economy had abated.
“Economic conditions in Australia have been stronger than expected a few months ago, with both consumer spending and exports notable for their resilience,” the statement says.
“Measures of confidence have recovered a good deal of ground.”
The statement adds: “The board’s judgment is that the present accommodative setting of monetary policy is appropriate given the economy’s circumstances.
“The board will continue to monitor how economic and financial conditions unfold and how they impinge on prospects for sustainable growth in economic activity and achieving the inflation target.”
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