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2014.09.1522:40:00UTC+00Australia C.bank Minutes: Most Prudent Course Likely to be a Period of Stability for Rates

  • In minutes of its Sept. 2 meeting, where the Reserve Bank of Australia (RBA) kept its cash rate steady at 2.5 percent for a 13th straight month, the bank reiterated that the most prudent course was for a period of stability in rates.
  • "Accommodative monetary policy was supporting demand in some sectors of the economy, but policy also needed to be cognisant of the risks to future growth that could accompany a large further build-up in asset prices, particularly if that was associated with an increase in leverage," the minutes said.
  • "For investors in housing, the pick-up in housing credit growth had been more pronounced than for owner-occupiers, with investor demand particularly strong in Sydney and to a less extent in Melbourne," it said.
  • "Members further observed that additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later."
  • The central bank again cited the Australian dollar as a drag on the economy since it remained "above most estimates of its fundamental value."It would therefore likely be content that the exchange rate has taken a spill in the last week or so, losing four U.S. cents to stand around $0.9025.

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