OCTOBER INTEREST RATE ANNOUNCEMENT:RBA KEEPS CASH RATE AT RECORD LOW DESPITE CALLS FOR REGULATOR INVENTION

Despite the continued rapid rise in house prices, the Reserve Bank of Australia announced on Tuesday that the cash rate will stay at the record low of 0.10 per cent for the eleventh month in a row. It also said that it’ll hold its quantitative easing program of purchasing $4 billion a week of government debt steady.

But that makes it only more likely that the RBA will be keen to see action from another direction to help cool the heat in the real estate market, says Stephen Koukoulas, managing director of Market Economics and a former chief economist of Citibank Australia

“They may want to see a little bit of spice added to the stew with some macro-prudential measures to tighten lending standards,” he said. “The Commonwealth Bank has already done a little of that off their own bat because, from the banks’ perspective, they don’t want to lend money to people who can’t repay them. 

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