Retailers can breath a sigh of relief as the Reserve Bank of Australia kept official interest rates on hold today. The central bank's move to maintain rates at 4.75 per cent comes after sluggish economic growth and ongoing weakness in retail sales.

"With Christmas just around the corner, the Reserve Bank of Australia decision to keep rates on hold will be welcomed throughout the retail sector," according to the Australian National Retailers Association (ANRA).

"It may not be enough to generate a surge in Christmas gift buying, but it is good news," the industry body said.

ANRA chief executive Margy Osmond said "Retailers will be breathing a sigh of relief that the RBA is listening to consumers, government and the retail community who are still doing it tough on the finance front and the November jump, coupled with the moves by banks to up rates beyond the 4.75 per cent threshold, has taken its toll.

"A survey of 1000 Australians by ANRA showed a third of consumers intended to slash their retail spending as a direct result of the November rise, another rise this month could have devastated Christmas retail.

"Despite positive economic conditions - high employment, the soaring dollar and general consumer confidence - this is not reflected in retail sales and shoppers are refusing to spend. October figures released last week showed a -1.1 per cent drop, even in a month where interest rates remained stable and people would have started the Christmas countdown.

"ANRA urges the RBA to keep rates on an even keel well into 2011 to give the retail sector a good chance of being part of the economic recovery," she said.