The Reserve Bank of Australia today retained the current official cash interest rate at its historic low level of 1.5 percent. The move was widely expected by economists surveyed by Bloomberg. All the economists agreed the interest rates will be kept on hold.
In his monetary policy statement earlier, RBA Governor Philip Lowe noted the strong global economy, the growth experienced by several advanced economies and the low unemployment rates. Global inflation remains low except in certain economies where it has increased.
The bank also forecast the Australian economy to grow to an average of 3 percent this year and in 2019. Business conditions remain positive while business investment in non-mining sectors is also on the rise. The high levels of investment in public infrastructure and growth in exports have been noted to support the country’s economy.
In terms of employment, Governor Lowe noted a strong growth over the past year. This growth was accompanied by an increase in labour force participation most notably women and older Australians. The unemployment rate has also dropped the past year. The Reserve Bank forecasts a solid growth in employment in the coming months with a gradual reduction in unemployment. Wages growth continues to low at this time but the bank foresees a rise over time.
As for the housing sector, the markets in Melbourne and Sydney continue to slow down with price falls noted in many areas in the past six months. A rise in supply of apartments are still expected in the eastern capital cities in the coming years. Risks in households have been contained owing to the supervisory measures and tighter credit standards imposed by APRA.
The Reserve Bank has not lifted interest rates since late 2010. It last cut the cash rate by 25 basis points in August 2016.
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By Wendy Chamberlain
Copyright 2018 | All Rights Reserved
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With a passion for all things real estate spanning over 20 years, Wendy loves that her role as a Buyers Agent or Sellers Advocate gives her buying and selling clients an experienced voice they can trust when it comes to negotiating to buy or sell something as important as their home or investment. Wendy considers it a privilege to be asked to help others realise such an important goal as home ownership and to be trusted with that honour. Get in touch today via www.chamberlainadvocates.com.au for a no obligation chat about how Wendy can work with you and help you save time and money to secure your new home sooner.
