Interest rate stays at 0.75 percent: Australian bank

Australia's central bank pointed to an uptick in previously flagging housing markets as a factor in its decision to keep interest rates on hold

Australia's central bank pointed to an uptick in previously flagging housing markets as a factor in its decision to keep interest rates on hold

The reserve Bank of Australia pointed to evidence that these steps contributed to the growth in housing prices and supported the reduction of household debt.

Australia's Central Bank left its key interest rate at a record low after three cuts a year ago.

The RBA left its economic growth forecast unchanged at 2.75 percent for 2020, rising to around three percent next year.

"Due to both global and domestic factors, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target", he said.

Dr Lowe did acknowledge the looming economic impact of the summer bushfires and coronavirus outbreak, but BIS Oxford chief economist Dr Sarah Hunter said the absence of any further insight was noted.

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While Oliver also shares the RBA's view that the economic drag arising from the bushfires and the coronavirus would only be temporary, these challenges could still have lingering impacts, especially on the tourism side.

Global risk appetite continue to gather momentum, with Wall Street up for a third session and the S&P500 at a new record amid robust USA economic data, namely the ADP employment and non-manufacturing ISM, OCBC Treasury Research reported. "This, in turn, is likely to see unemployment drift up a bit, underemployment remains very high, and wages growth and underlying inflation remain lower for longer", Oliver said.

However, many analysts believe rates could be cut further in the coming months.

Although the move fell in line with most economists' expectations, in the later months of 2019 markets were already pricing in an interest rate cut.

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