Australia’s Central Bank Sees Rates Staying Low for Some Time Given Spare Capacity

Melbourne. Australia's top central banker said on Tuesday it would keep interest rates very low for some time longer, while steps to contain the over-excitement in the housing market finely calibrated rather boring.

Reserve Bank of Australia (RBA) governor Glenn Stevens said there was plenty of spare capacity in the economy at this time that the mining investment boom subsided, which should keep inflation contained.

"In this case, you have an accommodative monetary policy and, in this indication, it might be more like it for some time," said Stevens dinner business economists.

In fact, Stevens made a sound as if there is a strict policy thinking is a distant prospect.

"There is enough spare resources as possible makes us able to enjoy several years of non-mining sectors of the construction of a little above the level of the trend before we worry too much about serious inflationary pressures," he said.

Financial markets implies no possibility of a rate increase for at least the next 12 months, although many economists thought possible transition from the third quarter of next year.

Places economy has become home prices, which have risen at double-digit annual rate in recent months largely because of demand from investors in the property.

Stevens stressed that this is not a bad thing in itself, especially since it spurred the revival that is needed in the construction of the house while supporting household wealth and spending.

"But for accommodative monetary policy to support the economy of the most effective overall, it's good if the bags of potential over-excitement does not get too carried away," he said.

As a result, the RBA cooperate with other regulators on a plan for a "suitable calibrated and committed action" to ensure that banks maintain their lending criteria.

The Australian Prudential Regulation Authority, which oversees the bank, said the announcement of the possibility of tighter lending standards before the end of the year.

Stevens also any action taken by the mind to prolong the recovery in home building.

"A high level of construction, be maintained for a long time, certainly better to boom and bust cycles are very sharp," he said.

Reuters

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