The Reserve Bank of Australia today decided to retain the current official cash interest rate at its current 1.5 percent level. The decision was expected by financial markets.
In his monetary policy statement, RBA Governor Philip Lowe noted the low interest rates “continue to support the Australian economy” in addition to increased investment in public infrastructure. He said that keeping the monetary policy unchanged would be consistent with the economy’s growth.
The RBA Governor also pointed out improvements in the global economy last year with several advanced economies including certain Asian countries growing at an above-trend rate. In Asia, for example, China continues to grow strongly despite the risks.
As for inflation, it is still low. However, this is foreseen to increase in the next two years due to higher prices of commodity and tight labour markets.
In the business sector, conditions are still looking positive and the outlook for the non-mining investment has also improved. The outlook for household consumption, though, remains uncertain as debt levels go up and household incomes are growing slowly.
Employment is also positive in all Australian states and an increase in labour force participation has been noted. A solid growth is expected in the coming months with a decrease in unemployment. The current low wage growth will continue but this will pick up due to the strong economy.
In the housing sector, house prices are steady in the past six months with falls noted in some areas of the country. More supply of apartments are expected in the eastern capital cities in the coming years.
The current interest rate level has been kept on hold since August 2016 when the Reserve Bank made a cut by 25 basis points.
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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 18 years, Wendy loves that her role as a Buyers Advocate gives her buyers an experienced voice they can trust when it comes to negotiating to purchase something as important as their new 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.FollowWendy.com 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.
