2018.11.2004:38:00UTC+00RBA To Maintain Steady Monetary Policy For A While, Lowe Says

The Reserve Bank of Australia would maintain a steady monetary policy for a while, as the board expects progress on the targets for unemployment and inflation to be gradual, RBA Governor Philip Lowe said Tuesday.

It is appropriate to maintain the current setting of policy for some time while progress on these goals are made, Lowe said in a speech at the CEDA Annual Dinner in Melbourne.

The Australian economy is performing well, Lowe said, adding that further progress is expected in lowering unemployment and having inflation returning consistent with the target.

The probability of a rate hike is higher than the probability of a decrease, he said.

"If the economy continues to move along the expected path, then at some point it will be appropriate to raise interest rates."

This will depend upon an improving economy and stronger growth in household incomes, Lowe said.

Lowe remarked that banks should be prepared to make loans on expectations that some borrowers would be unable to pay them back.

"Banks need to take risk and manage that risk well."

"If they become afraid to lend simply because of the consequences of making a loan that goes bad, our economy will suffer. So a balance needs to be struck here," he added.