That leaves the official cash rate at 3.75 per cent.
The Reserve Bank of Australia's statement said: "The global economy is growing, and world GDP is expected to rise at close to trend pace in 2010 and 2011. The expansion is still likely to be modest in the major countries, due to the continuing legacy of the financial crisis, resulting in ongoing excess capacity".
A rise of 25 basis points had been widely expected.
Earlier, Treasurer Wayne Swan warned the major banks not to increase their rates over the official cash rate.
He told ABC radio three major banks suffered a major backlash when they did so last time and they should heed the warning.
Government data released yesterday shows house prices in the country's eight capital cities grew an average 5.2 per cent in the three months to end-December lifting the annual rate to 13.6 per cent.
While other data showed building price pressures and the manufacturing sector expanding there was a surprise fall in job ads a key pointer to future employment growth.
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