{"id":30468,"date":"2021-02-03T14:30:11","date_gmt":"2021-02-03T01:30:11","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=30468"},"modified":"2021-02-03T14:30:11","modified_gmt":"2021-02-03T01:30:11","slug":"rba-leaves-cash-rate-at-record-low","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/rba-leaves-cash-rate-at-record-low\/","title":{"rendered":"RBA leaves cash rate at record low"},"content":{"rendered":"

PHOTO: The Reserve Bank of Australia. GETTY<\/strong><\/p>\n

The Reserve Bank has left interest rates unchanged at its first meeting of the year, with the Board voting to keep the official cash rate at a record low of 0.1 per cent.<\/h3>\n

The RBA also announced an expansion of its quantitative-easing program, pledging to buy an additional $100 billion worth of government bonds when the current purchase program is completed in mid-April, continuing at the rate of $5 billion a week.<\/p>\n

Reserve Bank Governor Philip Lowe said although the outlook for the global economy had improved and the prospects for a sustained recovery looked better than a few months ago, due to the development of COVID-19 vaccines, it remained dependent on the health situation and \u201csignificant fiscal and monetary support\u201d.<\/p>\n

\u201cInflation remains low and below central bank targets,\u201d Mr Lowe said in his statement following the meeting.<\/p>\n

He noted financial conditions remained highly accommodative, with lending rates for most borrowers at record lows and asset prices, including housing prices, mostly increasing.<\/p>\n

The RBA said housing credit growth to owner-occupiers had picked up recently, which was reflected in yesterday\u2019s ABS and\u00a0CoreLogic figures\u00a0showing the record-low interest rates and record-high property values had helped drive home lending to an all-time high.<\/p>\n

Mr Lowe said Australia\u2019s economic recovery was well under way and had been stronger than previously expected, with growth in employment and a decline in the unemployment rate to 6.6 per cent.<\/p>\n

Retail spending has risen and many households and businesses that had deferred loan repayments had now resumed repayments.<\/p>\n

But Mr Lowe noted that these outcomes had been underpinned by Australia\u2019s successful health response to the pandemic \u201cand the very significant fiscal and monetary support\u201d.<\/p>\n

He said wage and price pressures remained subdued, with the CPI increasing by only 0.9 per cent over the year to the December quarter and the Wage Price Index increasing at the slowest rate on record and inflation and wages growth expected to remain below 2 per cent over the next couple of years.<\/p>\n

Rates look likely to stay at record lows for the foreseeable future, with Mr Lowe saying the board remained committed to maintaining highly supportive monetary conditions and would not increase the cash rate until actual inflation was sustainably within the 2 to 3 per cent target range.<\/p>\n

He said this would require significant gains in employment and a return to a tight labour market, conditions the board did not expect to be met \u201cuntil 2024 at the earliest\u201d.<\/p>\n

Speaking following the RBA\u2019s decision, Mortgage Choice CEO Susan Mitchell CEO said: \u201cAs the Australian economy continues to strengthen and interest rates remain at record lows, the outlook for activity in the housing market remains strong\u201d.<\/p>\n

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