In this paper a new noise reduction algorithm for binaural hearing aids is proposed. This algorithm is capable of suppressing both nonstationary diffuse noise and unknown directional interferences without distorting the directional cues. For the estimation of the diffuse noise power spectral density (PSD), we utilize the eigenstructure of the 2×2 input covariance matrix, together with a compensation process for preventing the underestimation at low frequencies. The interference PSD is estimated from the target cancelled input signals through the signal prediction. Effectiveness of the proposed algorithm was confirmed according to the computer simulations in terms of noise reduction and binaural cue preservation.
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