Australian central bank keeps interest rates on hold

The Australian dollar fell almost a quarter of a U.S. cent on Tuesday after the Reserve Bank of Australia (RBA) kept interest rates on hold for the 14th month in a row.

The dollar was worth 87.34 U.S. cents at 12:33 p.m. (AEDT), down from 87.55 U.S. cents shortly before the RBA's decision was announced.

RBA governor Glenn Stevens said in a statement that the "most prudent course is likely to be a period of stability in interest rates."

Stevens said low interest rates would support demand and help economic growth to strengthen.

He said growth in the global economy was continuing at a moderate pace and mentioned that China's growth had generally been in line with policymakers' objectives, though some data suggested a slowing in recent months.

"Weakening property markets there present a challenge in the near term. Commodity prices in historical terms remain high, but some of those important to Australia have declined further in recent months," he said.

"In Australia, most data are consistent with moderate growth in the economy. Resources sector investment spending is starting to decline significantly, while some other areas of private demand are seeing expansion, at varying rates.

"Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend for the next several quarters."