Australian central bank predicts continued resources boom

Sydney, Aug 21 (IANS) The forecast of continuing resource investment and a period of low inflation were behind the decision of the Reserve Bank of Australia (RBA) to leave the cash rate on hold at 3.5 percent in August, it said Tuesday.

The RBA said the resources boom would continue for the next few years, reported Xinhua.

"Resource investment was projected to continue to increase rapidly over the next year or so, broadly in line with earlier expectations," the RBA said in the minutes of its August meeting.

The RBA also said resource investment was forecast to peak during 2013-14 and gradually decline over subsequent years, but the timing of the peak was uncertain.

The central bank said the inflation data for the June quarter were broadly in line with expectations.

"Inflation was forecast to increase a little as the effects of the earlier exchange rate appreciation continued to wane, and it would also be pushed higher by the introduction of the carbon price," the RBA said.

The RBA predicts inflation will be around the middle of its two to three percent target range by late 2013.