looks set to keep interest rates at record lows for the foreseeable future following minutes from its most recent board meeting.
The Reserve Bank noted current market pricing suggested “little chance of a change in monetary policy at present”.
“While advertised interest rates on home and business loans were generally unchanged, average interest rates on loans outstanding had continued to fall,” said the RBA
“The overall funding composition of Australian banks was little changed, with deposits remaining the dominant source of funding, but there had been a shift from term to at-call deposits in response to changes in relative interest rates.”
The board decided at its February meeting to keep rates on hold at 2.5%, following a series of rate cuts from its peak of 4.75% in November 2011.
“Members noted that the effects of low interest rates were clearly evident in the housing market, where prices had increased further and turnover had picked up to be just below average,” said the minutes.
“These conditions were expected to provide further support to new dwelling activity over the period ahead, and leading indicators of dwelling investment had increased.”
The board also noted that housing credit had been “gradually picking up”, particularly in the investment space.