Interest Rates on hold .... for now!

The RBA left the official cash rate at 4.50%, after three consecutive increases. The main factors behind the decision were:

* Ongoing uncertainty in global markets due mainly to European sovereign debt issues.
* Decline in the Australian dollar
* Softer global commodity prices
* Residential house price growth and sales volumes have slowed
* Retail sales have remained flat, increasing 0.6% in the month of April 2010.
* Total dwelling units approved declined 14.8% from March to April 2010 (Seasonally adjusted).

Westpac Bank currently forecast that interest rates will increase over the year and reach 5.00% by December 2010.