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Interest rates stay low


As was widely anticipated, the Reserve Bank of Australia opted to make no change to the official cash rate this week, leaving it at 0.75 per cent.

Overall, the Bank appears to be happy with the current situation. In a statement announcing the decision, RBA Governor Philip Lowe commented that the easing of monetary policy last year is supporting employment and income growth in Australia and returning inflation to a comfortable range.

"Lower interest rates have assisted with the process of household balance sheet adjustment", he said.

"They have also boosted asset prices, which in time should lead to increased spending, including on residential construction. Progress is expected towards the inflation target and towards full employment, but that progress is expected to remain gradual."

Lowe concluded that with mortgage rates at record lows and 'strong competition for borrowers of high credit quality', the RBA Board decided to hold steady this month.

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