The RBA surprises economists by holding the cash rate steady

Those holding loans can breathe a sigh of relief thanks to the Reserve Bank of Australia (RBA) deciding to hold off from a rate hike, keeping the cash rate at 3.75%.

Governor Glenn Stevens explained the move was partly as a result of the banks already lifting interest rates beyond the three cash rate increases over the past few months. He said, "Since information about the early impact of those changes is still limited, the board judged it appropriate to hold a steady setting of monetary policy for the time being."

Other influences on the decision include the possible effects of China attempting to slow its economy, and the continued instability of some foreign banks and countries.  The RBA also appears untroubled about price growth, with Mr Stevens saying inflation was likely to be consistent with the RBA's 2-3 per cent target this year.

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