Feb
05

Australia’s Housing Dilemma Will Keep RBA From Changing Rates

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  • RBA widely expected to leave cash rate at 1.5% on Tuesday
  • Aussie dollar strength is renewed headwind for economy

The Reserve Bank of Australia is setting one policy for two very different economies.

In the east, Sydney and Melbourne are seeing booming property prices and spiraling household debt; on the western side of the continent, housing and rental costs in Perth are falling as mining companies retrench. The upshot: interest rates aren’t likely to be going anywhere soon.

Governor Philip Lowe and his board convene Tuesday for their first policy meeting of the year with markets and economists confident there’ll be no change to the 1.5 percent cash rate — and could well be none for the rest of this year. Further clouding the picture is a renewed run up in the Australian dollar, reflecting a welcome spike in commodity prices…

Australia’s Housing Dilemma Will Keep RBA From Changing Rates

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