Sydney - Australia's central bank left the interest rate untouched at 3 per cent after its monthly meeting Tuesday, citing firming commodity prices and improving sentiment in markets around the world.

The cash rate had been lowered by 1.5 per cent over the past 12 months and some economists had predicted another reduction in the cost of borrowing to pep up demand.

“Present indications are that moderate growth in private consumption spending is occurring, though a return to the very strong growth of some years ago is unlikely,” bank governor Glenn Stevens said.

His statement also noted that “there are signs that the easier conditions are having some of the expected effects” with house prices moving up along with demand for consumer goods. - Sapa-dpa