Australia’s top central banker on Wednesday signalled further cuts in interest rates were unlikely as it would be “unwise” to risk further inflating already high house prices.
Reserve Bank of Australia (RBA) Governor Glenn Stevens said policy was already very accommodative and that was the right setting to support sectors outside of mining. However, the central bank did not want to foster too much build-up of risk in the financial sector, such that people became overextended.
“It is stating the obvious that at present, while we may desire to see a faster reduction in the rate of unemployment, further inflating an already elevated level of housing prices seems an unwise route to try to achieve that,” Stevens told an economics event in Adelaide. The RBA this week held interest rates at a record low of 2.5 percent, marking 12 straight policy meetings since it last cut.
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