As expected, the Reserve Bank of Australia has held its key cash rate at 2.5% and it has indicated the end of a two-year easing cycle.
"The most prudent course is likely to be a period of stability in interest rates," RBA Governor Glenn Stevens said in a statement. The Australian dollar's decline "will assist in achieving balanced growth," said Stevens, who left out references from past statements that the Aussie was "uncomfortably high."
Stevens expressed increased confidence in consumer demand and housing construction, and said he expects growth to strengthen beyond the short term, helped by low rates and the softer currency.
The S&P/ASX 200 closed -1.75%, although the Aussie has jumped 1.7% to $0.89. (PR)