The Reserve Bank has left interest rates unchanged today at 4.25% following its April monetary policy meeting, noting that while credit growth remains modest, “housing prices have shown some signs of stabilising recently, after having declined for most of 2011”.
It marks the third consecutive monetary policy meeting that the RBA has left the cash rate unchanged.
The decision will particularly disappoint the weaker sectors of the economy, including residential builders, retailers and manufacturers. ANZ has suggested “a hawkish RBA, a strong Australian dollar and tightening fiscal policy will exacerbate the ‘two-speed’ nature of the recovery”.
The RBA announcement followed this morning’s release of underwhelming retail sales figures from the ABS, which showed a 0.2% rise in February after a 0.3% gain in January and a flat December. The February figures were in line with expectations.
It also followed weak building approval figures issued yesterday.
Borrowers must now wait and see if lenders will adjust rates independently of the RBA move.
ANZ borrowers will have to wait until Friday, April 13 to find whether the bank will adjust its variable mortgage rates.
This article first appeared at Property Observer.