Tuesday, February 9, 2010

Australia's Stevens Waits for World's Central Banks

Assorted international currency notes.Image via Wikipedia

The head of Australia's central bank wants to give his economy a chance to absorb recent rate increases and let other world banks catch up

(Bloomberg) — Australian central bank Governor Glenn Stevens's unexpected decision to keep borrowing costs unchanged gives his economy a chance to absorb a record series of rate increases and allow global counterparts to catch up.

Policy makers kept the overnight cash rate target at 3.75 percent in Sydney yesterday, confounding the forecasts of all 20 economists surveyed by Bloomberg for a quarter-point move and driving the nation's currency to its lowest level in six weeks. Last year's 28 percent surge against the U.S. dollar, after Stevens became the only central banker from a Group of 20 nation to raise borrowing costs three times, has eroded earnings at exporters including BlueScope Steel Ltd.

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