Reserve Bank of Australia Governor Philip Lowe kept interest rates unchanged, signaling he’s prepared to tolerate weak inflation to avoid further stoking “briskly” rising property prices and household debt.
Lowe opted not to react to soft consumer prices growth last quarter and held the cash rate at a record-low 1.5 percent, as predicted by 22 of 28 economists surveyed and in line with money market bets. The new governor’s well-flagged concerns about easy money’s risks to financial stability and asset bubbles has led traders to scale back bets on a reduction next year as well.
“The economy is growing at a moderate rate,” Lowe said in his statement. “The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports.”