The board has once again decided to keep the cash rate on hold for another session. This is the 19th consecutive time this has happened.

The cash rate remains at 1.5%

Close scrutiny of the RBA minutes reveals that while the bank is optimistic about the future of not only the Australian economy but the global economy, they are still holding back due to high household debt and low wage growth.

RBA has predicted that the economy in Australia should be a bit above 3% for 2018 and 2019.

The head of the RBA Philip Lowe said that inflation is likely to remain low for some time due to the low increase in labour costs.

Most analysts have not factored in a rate increase until mid 2019.

Some other points to note in the global economy:

  • Chinese economy is still growing strongly
  • Global inflation remains low
  • Long term bond yields are rising
  • Housing markets in Sydney and Melbourne have cooled due to APRA lending restrictions