The Reserve Bank of Australia today decided to keep the current official cash interest rate at its historic low level of 1.5 percent. The decision made during the monthly board meeting was widely expected by financial markets.
In his monetary policy statement, RBA Governor Philip Lowe cited several factors supporting the strong performance of the global economy. These include the growth of advanced economies including those in Asia, low unemployment rates and increased international trade. Lowe also noted the low inflation globally, increased long-term bond yields and market volatility.
On the national level, the Reserve Bank is forecasting a faster growth for the Australian economy this year. Lowe cited the positive business conditions and rise in non-mining business investment. Other positive signs supporting the forecast are the increase in public infrastructure investment and growth in exports.
The only thing that’s uncertain for now is the outlook for household consumption. This is attributed to the high levels of debt and slow growth in household incomes.
In terms of employment, growth was noted in all states in 2017. This was coupled with a rise in labour force participation. Despite the low wage growth, the positive indicators are likely to result in a continuous growth in employment.
With regards to the housing markets, price falls were noted in some areas in the past six months while more apartments are expected in the eastern capital cities in the coming years.
The current interest rate level has been retained since August 2016 when the Reserve Bank made a cut by 25 basis points from the previous 1.75 percent.
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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.
