News: Reserve Bank Puts Interest Rates On Hold at 1.5 Per Cent

The Reserve Bank has left the official interest rates on hold at a record low of 1.5 per cent.

The bank board last changed the rates in August, cutting them by 25 basis points.

While business investment and employment numbers have improved, the bank board still maintained its conservative approach to rate setting.

“The various forward-looking indicators point to continued growth in employment over the period ahead,” said Philip Lowe, the bank’s governor.

“Wage growth remains low, however, and this is likely to continue for a while yet. Inflation is expected to increase gradually as the economy strengthens.”

Housing debt remains a major concern for the RBA. “Growth in housing debt has outpaced the slow growth in household incomes,” the bank stated. “The recent supervisory measures should help address the risks associated with high and rising levels of household indebtedness.”

However, there are some positive outlooks. “In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades.”

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