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RBA keeps key cash rate on hold at 4.75% (XAD) *PIC*

RBA keeps key cash rate on hold at 4.75% (by Sarah Turner)

SYDNEY (MarketWatch) -- The Australian central bank kept its key cash rate on hold at 4.75% Tuesday. The bank said that it took the decision as it judged that the current stance of monetary policy "remained appropriate in view of the general macroeconomic outlook," adding that inflation was currently consistent with its medium-term objective. The Reserve Bank of Australia, which was meeting for the first time this year, said it expects inflation in 2011 to be in line with its 2%-3% target range. It said the recent flooding is having a temporary adverse effect on economic activity and prices. However, damage and destruction from the floods means that aggregate demand will increase modestly over the next year or two, it said. A preliminary assessment is that net demand is unlikely to have a major impact on the medium-term outlook for inflation, the RBA said. The Australian dollar rose 0.1% to 99.92 U.S. cents after the decision.