February 2013

Welcome to our February newsletter

Just as many leading economists predicted, the Reserve Bank of Australia decided to leave the cash rate on hold at 3.0 per cent at its February meeting. As the effects of last year’s rate cuts continue to filter through the Australian housing and financial markets, the Reserve Bank decided to err on the side of caution. “Sentiment in financial markets has continued to improve, with risk spreads narrowing and funding conditions for financial institutions becoming more favourable,” Reserve Bank governor Glenn Stevens said. “The inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand.” The central bank’s decision comes on the back of some encouraging news in both the residential housing and mortgage/lending markets.
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