For the fifth consecutive month, the Reserve Bank of Australia (RBA) has kept the official cash rate on hold at a record low of 1.50 per cent in December.
Once again, the RBA said the global economy is continuing to grow, but at a lower than average pace.
The central bank noted that commodity prices have risen throughout 2016, although they remain much lower than they have been in recent years. Nevertheless, the RBA stated that the rebound in commodity prices are boosting national income.
Regarding inflation, the RBA says it remains "quite low", and will remain that way for some time before returning to more normal levels.
Although the RBA noted a decline in the unemployment rate, it also stated there was a slowdown in employment growth -- with labour underutilisation still an inssue given the strong growth in part-time employment.
In terms of the housing market, it varies from state to state. Some states' markets experienced a "brisk" rise in housing prices, while others are "declining". The RBA said that growth in rents is "the slowest for some decades".
The RBA has previously eased monetary policy at its May and August meetings. Therefore, the Board decided that keeping rates unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
The Aussie dollar dropped marginally to $US0.7454 following the RBA decision.
