The Reserve Bank has once again left the cash rate untouched.
At its board meeting today, the RBA
chose to leave the official cash rate at 2.5%, marking the 14th consecutive monthly meeting in which the Bank has chosen to remain on the sidelines.
Economists had widely tipped the RBA
to leave the cash rate unchanged, though the Reserve Bank has expressed concern about the level of investment in housing. Rather than using rates to tackle the issue, however, RP Data research director Tim Lawless
said the RBA
is more likely to use macro-prudential tools.
"From a housing market perspective, the RBA
is more concerned about the level of investment in housing rather than the pace of capital gains. In fact, the rolling annual change in capital city dwelling values has been moderating since April this year, suggesting that some heat is coming out of the market. Rather than pushing interest rates higher, which would have a detrimental effect on many aspects of the economy, it is looking more likely that APRA
and the RBA
will aim to cool investor demand by tweaking the risk appetite for bank lending to investors," he said.