Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  News  >  Economy & Forex

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

Reserve Bank of Australia Holds Line; Jittery About House Prices

04/05/2021 | 11:08pm EDT

By James Glynn

SYDNEY--The Reserve Bank of Australia kept interest rates unchanged at a policy meeting Tuesday but signaled its rising concerns about surging house prices.

The RBA kept its official cash rate and target for three-year government bond yields at 0.10%, as expected by economists. The central plank of the central bank's policy position, guidance that interest rates won't be raised until 2024, remained unaltered.

"The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3%. For this to occur, wages growth will have to be materially higher than it is currently," RBA Gov. Philip Lowe said in a statement.

"This will require significant gains in employment and a return to a tight labor market. The Board does not expect these conditions to be met until 2024 at the earliest," Mr. Lowe said.

The RBA has stuck to its policy line, but pressure may grow later this year for it to more fully acknowledge the rapid pace of recovery in the economy, which has been highlighted by a surge in job creation.

ANZ reported earlier Tuesday that job ads were at a 12-year high in March, data that is consistent with recent big falls in the unemployment rate.

The jump in job ads also comes at a critical time for the economy, as the government withdrew its wages subsidy program--a key support for the economy during the pandemic--at the end of March. The decision still holds the potential to send a lot of people into unemployment.

Record-low interest rates are also fueling a problem in the housing market, with homes prices rising at their fastest pace since 1988 in March. Economists are now forecasting big gains in house prices through this year, something that could stoke concerns about household debt levels, bank lending standards, and overall financial-sector stability.

"Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained," Mr. Lowe said.

The RBA will deliver its latest financial stability review on Friday and its commentary around house prices will be watched closely. Many economists expect the banking regulator to tighten mortgage-lending criteria in the coming months if the frenzy in the housing market doesn't abate.

The RBA has already extended its bond-buying program out to the end of September, with some economists expecting further extensions as the central bank battles to move the economy back toward full employment.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

04-06-21 0108ET

Latest news "Economy & Forex"
05:57pGameStop CEO forfeits over 587,000 shares for not meeting targets
RE
05:41pClearing a Path Toward Transparency, Inclusion, and Sustainability in Panama
PU
05:41pWORLD BANK  : Promoting Climate Change Action in Latin America and the Caribbean
PU
05:39pCLARIDA : If inflation expectations 'drift up persistently,' Fed would need to respond
RE
05:32pUK finance lobby urges rules rethink to unlock capital for COVID-19 recovery
RE
05:32pNew Zealand House Prices Hit New Record High in March
DJ
05:25pAGA AMERICAN GAS ASSOCIATION  : Natural Gas Distribution Emissions Continue to Fall
PU
05:13pUtilities Up As Sector's Upward Momentum Gains Steam -- Utilities Roundup
DJ
05:11pCANADA STOCKS - TSX falls 0.17% to 19,171.66
RE
05:11pCommunications Services Down On Value Bias -- Communications Services Roundup
DJ
Latest news "Economy & Forex"