Hi Property Lovers
I came across this article which was a good read. Ive posted it for all reference.
The cash rate remains stable at three per cent following a Reserve Bank of Australia (RBA) Board meeting on Tuesday 1 September.
It's the fifth month the rate has remained stable, with the last fall occurring in April.
Some economists and analysts have recently predicted the RBA will increase the cash rate as soon as October, amid positive signs that the Australian economy is improving along with consumer and business sentiment.
It's believed a three per cent setting is quickly becoming no longer appropriate, given that there is now a lack of any macroeconomic "emergency".
But RBA Governor Glenn Stevens has indicated that the current cash rate setting is appropriate for the time being.
"The Board will continue to adjust monetary policy so as to foster sustainable growth in economic activity and inflation consistent with the target," he says.
With considerable economic policy stimulus being implemented around the world, Stevens notes the global economy is resuming growth.
The major economies appear to be approaching a turning point, he says, and in Australia economic conditions have been stronger than expected with consumer spending, exports and business investment showing resilience.
"Measures of confidence have recovered. Some spending has probably been brought forward by the various policy initiatives; in those areas demand may soften in the near term," he says.
"Some types of capital spending are also likely to be held back for a while by financing constraints."
"But overall, it now appears that investment may not be as weak over the year ahead as earlier expected."
"Higher dwelling activity and public demand will also start to provide more support to spending soon and, hence, growth is likely to firm going into 2010."
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