The Reserve Bank of Australia has bucked the trend of a Melbourne Cup interest rate cut by keeping the official cash rate unchanged at 3.25 per cent.


In his statement, RBA Governor Glenn Stevens said that below average global growth and subdued commodity prices had informed the decision.


Mr Stevens also cited the declining terms of trade as another key reason, which have fallen by about 13 per cent since peaking late last year.


“Recent outcomes on inflation were slightly higher than expected, though they still show inflation consistent with the medium-term target, with underlying measures around 2½ per cent over the year to September, and headline CPI inflation a little lower than that,” Mr Stevens said.


The Governor also cited the carbon price as an influence on consumer prices in the September quarter, and that some small after effects over the coming quarters are to be expected.


Mr Stevens also said that the growing unemployment should work to contain pressures on labour costs in sectors outside of the influence of resources.



Mr Steven’s full statement can be found here