The Reserve Bank of Australia has left the cash rate on hold at 2% this Melbourne Cup.
chief executive John Flavell says there was no need to further ease the moentary polic setting with consumer sentiment and business confidence both receiving a boost in recent weeks, following the Government spill and subsequent appointment of a new Prime Minister.
“According to the latest data from the Westpac Institute of Consumer Sentiment, confidence climbed 4.2% over the month of October. Further, data from National Australia Bank shows there was a partial recovery in business confidence, with financial market volatility and emerging market concerns moderating from the heights of the previous month,” he said.
“Both of these factors combined gave the Reserve Bank no real push to cut the cash rate. Moreover, given that most of the major lenders have moved out of cycle with the Reserve Bank in recent weeks, we have seen property demand start to wane ever so slightly.”
Recent figures released by Core Logic found the hottest housing markets in the nation – Sydney and Melbourne – have continued to see an easing in the rate of capital growth.
“The Reserve Bank would be pleased to see that confidence is improving and the property market is cooling without the Board having to interfere with the monetary policy setting,” Flavell said.