The Reserve Bank of Australia left the official cash rate on hold yesterday at 4.75 per cent, as was widely anticipated.
The central bank has now left the official rate on hold since December of last year and the industry wants to see this stability remain.
Loan Market Group chief operating officer Dean Rushton said the Reserve Bank should leave the cash rate on hold for the remainder of 2011.
Multiple rate rises in 2010 were still having an impact through much of the economy, he said.
“In particular the November rate increase accompanied by the banks’ additional rate increases has had a significant influence on consumer sentiment and many elements of the economy, particularly the home finance market and the retail sector, are still struggling as a result,” Mr Rushton said.
Mr Rushton said consumer confidence was also suffering as a result of the various natural disasters that have occurred in recent months.
“Interest rates look like staying on hold for some months and most economists are now forecasting that this year there may only be one more quarter percentage point increase,” he said.
“We would like to see the RBA stay its hand for the remainder of 2011 to allow consumer confidence to return and to take undue pressure of household budgets.”