RBA holds rates but suggests cuts could follow

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The board of the Reserve Bank of Australia (RBA) today held its benchmark interest rate at 3%, but left the door open for further easing at future meetings.

Inflation rose to 2.2% in December, consistent with the RBA's medium-term target, and the central bank believes it will remain around this level for the next one or two years.

Glenn Stevens, the RBA governor, said this gives the board the flexibility to cut rates if they see fit. "The inflation outlook, as assessed at present, would afford sc

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