Australian keeps rates on hold at 2.5pc

SYDNEY, July 1 (AFP): Australia's central bank kept interest rates on hold at a record low 2.5 per cent Tuesday, as a resilient currency and softening commodity prices hobbled the economy's shift away from mining.
The Reserve Bank left the cash rate unchanged for its 10th straight meeting as it continued to highlight the need for accommodative monetary policy to "provide support to demand and help growth to strengthen over time".
But it expanded on its frustrations about the recent strength of the Australian dollar, saying it was "offering less assistance than it might" in lifting growth in non-resources sectors.
"The exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy," RBA governor Glenn Stevens said.
The local unit jumped by a quarter of one US cent to 94.44 US cents following the release of the central bank's statement.
JP Morgan's chief economist for Australia Stephen Walters said it was clear the RBA was content to stay the course at this time, although he questioned why it was not more robust in its commentary on the exchange rate.
"The big issue is ... why they are not re-engaging on the Aussie dollar, which seems a little puzzling," Walters said.