The Reserve Bank of Australia today left the current official cash interest rate unchanged at its historic low level of 1.5 percent. An earlier survey showed most respondents predicting the current rate to be kept on hold.
In his monetary policy statement earlier, RBA Governor Philip Lowe noted that “global economic expansion is continuing, a number of advanced economies are growing at an above-trend rate and unemployment rates are low.” He also cited the growing Chinese economy and the low inflation rate although increases are expected in some economies amid tight labour markets.
Financially, the appreciation of the U.S. dollar and the rise in short-term wholesale interest rates in Australia were taken into account.
The Australian economy, for its part, remains consistent with the Reserve Bank’s forecast for GDP growth. GDP performed strongly in the March quarter.
Business conditions are still positive while business investment in non-mining sectors is also increasing. The high levels of investment in public infrastructure and growth in exports continue to support the country’s economy.
In the labour market, Governor Lowe noted a strong employment growth coupled with an increase in labour force participation. The unemployment rate of 5.5 percent has not changed in the past year. In terms of wages, growth remains low but an increase is likely over time.
As for the housing sector, house prices continue to decline although conditions in Melbourne and Sydney have eased. Following the same trend is the housing credit growth due to a slow investor demand. Lending standards are also foreseen to be further tightened with APRA implementing its supervisory measures.
The Reserve Bank has not lifted interest rates since August 2016.
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By Wendy Chamberlain
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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.wendychamberlain.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.