The Reserve Bank of Australia decided to keep the key rate at 1% despite indications of a slowdown in the economy.
In its statement, the central bank revised its previous references to GDP growth of 2.5% this year and 2.75% in 2020. It now predicts that economic growth will be in line with the "trend of next two years ".
"The economic growth in Australia in the first half of this year was below expectations, household consumption was held back by a prolonged period of low income growth and falling housing prices and homeownership. # 39; business, "said the RBA's governor, Philip Lowe statement.
However, Lowe noted signs of reversal in established housing markets, particularly in Sydney and Melbourne.
The RBA watches closely
It seems the central bank is taking a wait-and-see approach with regard to monetary policy decisions, said AMP economist, Capital, Shane Oliver, at ABC News.
Oliver said the RBA was trying to monitor the consequences of recent consecutive rate cuts and federal tax cuts for low and middle income people.
Read also: The forecasts of the big banks "Multiple rate reductions"
"However, even though these measures will help avoid the recession, we doubt that they will be enough to generate decent growth, and the July evidence is not so encouraging," he said.
Oliver said that in the current situation, rate cuts would be imminent, as the rebound in the real estate sector could potentially lead to a new price bubble.
"While the rebound in the Sydney and Melbourne property markets could pose a problem to the RBA in terms of rate cuts, it is likely that the RBA will do what it thinks is right for the" Australia's "average property rather than that of two-city markets," he said, "but it may be that he has to resort again to stricter regulatory controls if he must cool the real estate markets of Sydney and Melbourne again for reasons of financial stability. "
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