Australia central bank keeps policy rate steady

LOS ANGELES (MarketWatch) -- The Reserve Bank of Australia kept its benchmark cash rate unchanged at 4.5% Tuesday, as widely expected, citing in-line growth and inflation. "With growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain, the board judged this setting of monetary policy to be appropriate," RBA Gov. Glenn Stevens said in a statement accompanying the policy decision. The statement retained language describing the global economic recovery as "uneven" but said that Australia's output is likely to grow above trend during the year ahead. But, Stevens added, "Consumption spending is recording a modest increase at present, with households displaying a degree of caution," even as business investment is likely to increase. He said the central bank's underlying inflation measures will probably remain in the top half of the RBA's target zone through the middle of 2011. The Australian dollar edged higher against its U.S. counterpart following the announcement, rising to 91.04 U.S. cents from 90.92 U.S. cents just prior to the move.