Australian central bank leaves rates unchanged

SYDNEY - Australia's central bank left interest rates unchanged at 5.5 per cent for a second month in a row on Wednesday, a widely expected decision following data showing inflation was contained.

The Reserve Bank of Australia (RBA) does not issue a statement when it leaves interest rates unchanged.

However, economists expect the central bank to suggest it has a tightening bias when it releases a quarterly statement on monetary policy on Friday because of a tight labour market.

The RBA raised interest rates by 25 basis points in March, the first increase in more than a year, citing inflation risks from high wage demands in a tight labour market and by capacity constraints after 14 years of continuous economic expansion.

Economists polled by Reuters on Friday gave just a 20 per cent chance of a rate hike. Three of the 17 polled expected a rate hike by mid year, nine saw a 5.75 per cent rate by the end of September and 10 saw a rate of 5.75 per cent or 6.0 per cent by the end of the year.

- REUTERS