The Reserve Bank has kept the interest rates at record low levels for over a year and economists have been quick to point this out as a period of stability for the economy. Ironically, the RBA has decided against any changes on the interest rate as the economic drivers remain unstable, with the slowdown in mining investments, unemployment and the elevated currency.
Australia posted its highest unemployment rate in July at 6.4% – higher than the United States for the first time since 2007. The local currency also remained higher than what was expected by the central bank. In the housing sector, home prices rose by 1.8% in the second quarter of the year. All these and contributed to the RBA’s decision to keep the interest rates on hold, with these factors tipping both ends of the economic scale.
Read more about this on the Sydney Morning Herald website.