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RBA Keeps Cash Rate Unchanged

The Reserve Bank of Australia decided to keep its cash rate unchanged as expected at its October meeting.

The monetary policy board retained the cash rate at 2.50 percent. The rate has been at the current level since August 2013.

Policymakers said continued accommodative monetary policy should provide support to demand and help growth to strengthen over time. Inflation is expected to be consistent with the 2-3 percent target over the next two years.

The bank reiterated that the most prudent course is likely to be a period of stability in interest rates.

The bank also repeated that global economy is continuing to grow at a moderate pace. But, it noted that China's growth has shown signs of slowing. Also, prices of commodities that are important to the country have declined further, the bank said.

Volatility in some financial markets has picked up in recent weeks, the RBA assessed.

Regarding the economy, the RBA said that most data are consistent with moderate growth. Though the bank maintained its view that the resources sector investment spending is starting to decline significantly, it added that some other areas of private demand are seeing expansion, though at varying rates.

Labor market data have been unusually volatile of late, the bank said.

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