Reserve Bank keeps rates on hold at record low 1.5pc

The Reserve Bank of Australia has left interest rates unchanged after its monthly board meeting.

As was widely expected, the central bank left the official cash rate at a record low of 1.5 per cent for the 28th consecutive month.

RBA Governor Philip Lowe today reiterated that: “Further progress in reducing unemployment and having inflation return to target is expected, although this process is likely to be gradual.

“Taking account of the available information, the board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time,” he said, repeating the line used in recent months.

Dr Lowe today hinted at concerns over the potential impact of falling Sydney and Melbourne house prices.

“Credit conditions for some borrowers are tighter than they have been for some time, with some lenders having a reduced appetite to lend,” Dr Lowe said.

That could have a negative effect on household consumption when the September quarter GDP figures are released tomorrow.

The RBA has repeatedly signaled the cash rate is not likely to change for some time.