The Housing Industry Association , the voice of Australia’s residential building industry reports that the Board of the Reserve Bank of Australia has left its Official Cash Rate unchanged at 2.5 per cent.
HIA Economist, Geordan Murray observes recent commentary from RBA officials clearly communicated the Bank’s expectation that rates would be on hold for a sustained period of time. The decision to leave interest rates at the current level is therefore consistent with this expectation.
While noting the domestic economic growth has been below-trend, the RBA statement suggests the Board’s confidence has been buoyed by positive developments in the household sector, most notably the strong leading indicators for residential construction.
According to Geordan Murray, the strength of the labour market appears to be at the forefront of the Board’s concerns, although the statement belies a confidence that the accommodative monetary policy settings will enable conditions to improve within the foreseeable future.
However, the strength of the Australian currency remains a concern for the Board, although with the level currently well below where it was a year ago, there is no sense of urgency on this issue, said Geordan Murray.