Australia’s central bank leaves interest rates on hold

Sri Dharanee Performance Arts Theatre

SYDNEY, Dec 5, 2007 (AFP) – Australia’s central bank left interest rates on hold at an 11-year high of 6.75 percent Wednesday, while warning that it remained concerned about inflationary pressures.

The decision by the Reserve Bank of Australia had been widely anticipated by economists, who believed the bank was likely to take the view that it was too early to judge the effect of a quarter percentage point rise last month.

November’s rate rise was the second this year, coming after a 25 basis points rise in August, and the tenth since 2002.

The steady rise in interest rates and its effect on mortgage holders was seen as contributing to the defeat in elections last month of former prime minister John Howard, who had pledged to keep rates low.

Howard, whose conservative government had been in power for nearly 12 years, was ousted by the centre-left Labor Party led by Kevin Rudd.

The central bank broke with tradition Wednesday to issue a statement explaining its reasoning in leaving rates unchanged.

“The board remains concerned about the outlook for inflation,” it said.

“But given the heightened uncertainty about the international outlook and the local trends in whol