- Reserve Bank of Australia
The Reserve Bank of Australia reiterated its view that a weak Australian Dollar and record low interest rates helped to rebalance the nation's economy and strengthen the labour market. Even though the central bank expected a period of sluggish economic activity ahead, meaning monetary policy is likely to stay loose for some time, the RBA looked to be in no mood to cut interest rates, the minutes of its October 6 policy meeting showed. The key risks to financial stability and to the Australian's economy overall revolve around developments in an overheated property market. House prices in major cities like Sydney and Melbourne have surged sharply over the last year, triggered by speculative investment, low interest rates and robust demand from overseas buyers. The RBA warned about an imbalance in lending and risks of potential house price falls.
The RBA kept interest rates unchanged at an all-time low 2.0% at the meeting, holding rates at the level since May. Most economists now believe that only severe deterioration in the unemployment rate or considerably weaker growth than the RBA is predicting may prompt another rate cut.
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