The Reserve Bank of Australia (RBA) has decided to keep Australia’s official cash rate on hold at an historical low of 2.5 per cent for its ninth straight meeting and affirmed its neutral bias.
Economists had unanimously tipped the RBA would maintain the cash rate steady after last month forecasting a period of stability in interest rates.
In its June meeting minutes the central bank noted a recent decline in commodity prices but says they remain high in historical terms - as does the exchange rate despite commodity price falls.
Across the housing sector the RBA says dwelling prices have increased significantly over the past year, though there have been some signs of the rate of growth moderating.
The RBA also noted volatility in many financial prices is currently unusually low, and, markets appear to be attaching a very low probability global interest rates will rise.
Looking ahead the central bank says continued accommodative monetary policy should provide support to demand, and, help growth to strengthen over time.
FNN speaks with the Housing Industry Association’s Chief Economist Harley Dale about his outlook for interest rates this year [Video Commentary].
