News

RBA leaves interest rates alone for another month

04 August 2021

The Reserve Bank has kept the official cash rate at 0.1 per cent at its August meeting.

Several states are currently dealing with various degrees of lockdown in the fight against the delta strain of COVID, but it hasn’t stopped the property market recovery in most areas from showing strong growth.

As it has done for the last few months, the RBA says it continues to keep close watch on the rising property markets around Australia.

"Housing markets have continued to strengthen, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, including first-home buyers," RBA governor Philip Lowe said in his statement.

"There has also been increased borrowing by investors.

"Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained."

AMP Capital chief economist Shane Oliver says it’s still some time away before the RBA’s economic targets will most likely be met for them to make a move on rates.

"The RBA is still a long way from meeting its conditions for a rate hike – namely inflation sustainably back in the 2–3 per cent target range which will require full employment and wages growth sustainably above 3 per cent," Dr Oliver told Nine News.

"And the latest coronavirus outbreaks and lockdowns risk delaying progress towards its goals."

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