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As was widely expected, the RBA kept rates on hold at its December meeting. The bank’s headline cash rate has now sat unchanged at record lows of 1.5% since August 2016 when the bank last adjusted rates with a reduction of -0.25%.
The statement was little changed from last time around and gave very little to be excited about as the RBA continued to highlight risks from both external factors, such as lower global growth due to trade uncertainty and domestic factors, such as low household income and high levels of household debt.
While the bank maintains that a gradual increase in inflationary pressures over the coming years will likely warrant a rate hike it said that it does not want to tighten policy prematurely and risk stalling progress within the economy.
Concerns Around Tighter Lending Standards
The need for policy stability was especially high given the bank’s concerns around tighter home loan lendin...
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