For the sixth straight month, the Reserve Bank of Australia has left the official cash rate on hold at 1.5 per cent, following its latest board meeting.
In its official statement, the RBA noted improved conditions in the global economy over recent months, business and consumer confidence in a number of advanced economies and above-trend growth as drivers of its decision.
Strong growth in China over the second half of 2016, buoyed by higher spending on infrastructure and property construction is likely to create medium-term risks to Chinese growth, the RBA said.
“The improvement in the global economy has contributed to higher commodity prices which are providing a boost to Australia’s national income.”
Looking ahead, the outlook continues to be supported by the low level of interest rates. Financial institutions remain in good position to lend.
Turning to the housing markets, the RBA had this to say:
“Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In 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. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.”
You can read the full statement here.
