RBA Sticks by Low Interest Rate Regime, Says HIA
The Reserve Bank of Australia today decided to maintain its key interest rate at an all-time low of 2.5 per cent, said the Housing Industry Association, the voice of Australia’s residential building industry.
"Today’s decision by the RBA to hold rates was widely anticipated by the market and represents a sound policy prescription for the Australian economy at this time," commented HIA Senior Economist, Shane Garrett.
"We expect the RBA to stick with a low interest rates policy for the foreseeable future," remarked Shane Garrett.
"There is no serious inflationary threat at the moment, and low interest rates will continue to guide the Australian dollar lower on foreign exchange markets," noted Shane Garrett.
"A lower dollar means stronger demand and this is something we need with mining investment coming off peak," explained Shane Garrett.
"Low interest rates can help to bolster domestic demand in particular," continued Shane Garrett. "The recovery in new dwelling investment over the past year is evidence of this. However, the weak state of the home renovations market underlines the need for interest rates to remain low in order to revive activity across all sectors of the economy," added Shane Garrett.
"In today’s statement, the RBA has emphasised the importance of stable interest rates at this time. Accordingly, we may be set for record low interest rates for a prolonged period," concluded Shane Garrett.
Shane Garrett, Senior Economist, HIA