The Reserve Bank has once again decided to leave interest rates on hold. The cash rate has now remained at 1.50% for the past 7 months.
The next meeting is scheduled for Tuesday April 4.
Interest rates have increased in the United States and there is no longer an expectation of further monetary easing in other major economies. Financial markets have been functioning effectively and stock markets have mostly risen.
This comment is repeated from their last meeting notes. It still appears more than likely that the next interest rate move is up rather than down.
Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has been steady at around 5.75 per cent over the past year, with employment growth concentrated in part-time jobs.
In Western Australia unemployment is higher than the national average at 6.9% in November. A “Jobs & Growth” strategy has formed a large part of the major parties key election promises.
Regardless of who wins the election it may be sometime before this figure turns around with many major projects years away.
Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.
Recently some lenders (notably Commonwealth Bank & Bankwest) have placed restrictions on borrowers refinancing investment loans. Other lending policy changes include some lenders no longer allowing first home buyers to borrow their deposit as a personal loan.
Full notes from the meeting can be found on the RBA Website.