Australian central bank keeps interest rate at 4.75 %

Australia's central bank, Reserve Bank of Australia, has left interest rates unchanged at 4.75 per cent amid weak domestic data and a slower pace of economic growth due to the economic impact of unprecedented floods.

The central bank's data showed that retail sales fell in May as consumers tried to pay their mortgages and therefore decided after its monthly meeting today that another pause would be significantly needed to encourage consumer spending.

Australia's residential building approvals fell 7.9 per cent in May, much more than the 0.5 per cent fall expected by analyst, the statistics agency said on yesterday.

Some analysts feel a steady interest rate would help boost the real estate and retail sectors, which have been stagnating for some time and expect these sectors to bounce back in 2012.

RBA had last increased overnight cash rates in November 2010 to 4.75 per cent from 4.5 per cent and most analysts expect another rate hike to take place towards the end of the year.

The numbers of those with full-time jobs also declined in April and May, recording their biggest fall in more than two years, as growth contracted and Australia's GDP declined by 1.2 per cent in the first quarter, the biggest fall in 20 years.