The official interest rate has remained unchanged since August 2013.
THE Reserve Bank has left interest rates on hold at a record low 2.5 per cent. The rate has remained unchanged since August 2013.
The RBA has traditionally moved the cash rate on Melbourne Cup Day but hasn’t done so since 2011.
Economists widely expected rates to stay the same with the consensus it will remain stagnant until next year.
HSBC chief economist Paul Bloxham said the record low cash rate is doing its job, but it is also creating risks in the housing market as home prices surge.
“After a long period in which Australia was building mines and too few houses, there is now a strong pipeline of housing construction.”
The RBA is working with regulators on potential changes to lending rules to address the rapid rise in loans to housing investors, who are pushing up prices and making it more difficult for owner occupiers and first-home buyers.
Mr Bloxham said the introduction of new regulations to put a lid on housing prices in Sydney and Melbourne will allow the RBA the keep the cash rate unchanged until mid 2015.
Retail spending and international trade reports released while the board is meeting won’t change its rate decision, but they may give some clues to the pace of economic growth for when the September quarter national accounts are issued early next month.