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Australia leaves rates on hold
SYDNEY, Australia (CNN) -- Australia's central bank has again left its benchmark interest rate unchanged at 4.75 percent. The decision, announced by the Reserve Bank of Australia on its website Wednesday morning after a board meeting a day earlier, was widely expected. The bank has now left rates on hold since June last year, when it raised the cash rate target by a quarter of a percentage point to 4.75 percent. The next move is expected to be a rate cut, possibly by mid-year. The weaker global economic outlook and a downturn in Australia's tourism and transport sector brought on by the SARS virus are weighing on the Australian economy following its strong run in 2002. As well, the impact of the devastating 2001-02 drought is continuing to be felt in the country's agricultural sector, despite good recent rains. Exporters are also under pressure from this month's rise of the Australian dollar to a three-year high against the U.S. greenback. The Australian currency is trading at 64.11 U.S. cents near midday Wednesday and has put on more than 14 percent since the start of the year. Economic growth forecasts for Australia this year are in the range of 2.75 percent to 3 percent, rising to about 4 percent in 2004. On the equity front, Australia's benchmark S&P/ASX200 is at 2984.1, still three-quarters of a percent below its opening level for the year, but well above the three-year low of 2693.3 it touched on March 13. Late last month New Zealand's central bank surprised the markets by cutting its benchmark rate by 0.25 percentage points to 5.5 percent. It was the bank's first change since July last year.
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