Punter wins big as rates held

A GAMBLER has bet $45,000 that rates will be kept on hold today and economists support his call.

No change? ... the RBA is expected to leave rates on hold. Graphic: Eric Auld

RBA holds interest rate at 3pc Official rate remains at 49-year low Interest rates: Find out more

THE Reserve Bank has left the official interest rate unchanged at its board meeting today amid signs of stabilisation in the global economy.

But economists say there's still a chance of more rate cuts towards the end of this year if domestic and offshore economic conditions worsen.

The decision was widely expected, with many economists tipping the cash rate to remain unchanged at a 49-year low of three per cent.

It's good news for one Sydney punter, who wins $5400 after betting $45,000 on no rate change.

The bet was placed at the slim price of $1.12 with bookmaker Centrebet.

The same punter won $30,000 last month after betting $90,000 on a no interest rate change outcome across two bets at $1.45 and $1.28.

The RBA last cut the cash rate by 25 basis points in April ending 425 basis points worth of reductions since September.

The central bank has since indicated it is in no rush to lower rates further as it assesses the impact of its easier monetary policy stance and the Federal Government's stimulus packages.

The stimulus packages have buoyed the retail industry, with figures out yesterday showing consumers spending a record $19.4 billion shopping in April.

But economists doubt this will be enough to prevent tomorrow's national accounts showing the economy in recession.

There is an expectation of a modest contraction in gross domestic product (GDP) growth in the national accounts in the March quarter.

This would follow the 0.5 per cent decline in the December quarter, making it an official recession with two quarters of negative growth.

In more positive news, the Australian dollar is at an eight month high of 81 US cents, on the back of better-than-expected US manufacturing data and soaring commodity prices.