No Need to Panic: RBA Rate Decision

Rba rate decision

The Reserve Bank has kept the official cash rate on hold at 1.5 per cent for its 10th meeting in a row.

On handing down the decision RBA Governor Philip Lowe said in a statement that while house prices were rising briskly in some markets, there were “some signs that these conditions are starting to ease”.

The cash rate last moved in August 2016, when it was cut by 25 basis points to its current record low, following an earlier cut to 1.75 per cent in May.

Governor Lowe went on to say that growth in housing debt had "outpaced the slow growth in household incomes”.

“The recent supervisory measures should help address the risks associated with high and rising levels of household indebtedness.

“In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades," he explained.

Last week, former RBA board member John Edwards warned there could be as many as eight interest rate rises in the next two years as economic growth picks up.