SYDNEY, April 6 (Reuters) - Australia’s central bank left interest rates at an all-time low on Tuesday in a widely expected decision but cautioned it would “carefully” monitor trends in property debt as the housing market boomed.
The Reserve Bank of Australia (RBA) also reiterated its commitment to keep policy accommodative for as long as is needed to pull down unemployment and push inflation higher, signalling the cash rate would remain at 0.1% until at least 2024.
The RBA cut interest rates three times last year, announced a yield curve control programme to keep three year government bond yields at 0.1% and launched a massive quantitative easing programme targeting longer term bonds.
On Tuesday, it held the cash rate for its fourth straight meeting.
“The Board is committed to maintaining highly supportive monetary conditions until its goals are achieved,” RBA Governor Philip Lowe said in a short post-meeting statement.
“The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range,” he added. “The Board does not expect these conditions to be met until 2024 at the earliest.”
The ultra-easy monetary policy settings have helped Australia pull out of its first recession in three decades. Data on retail sales, construction activity, business confidence, consumer sentiment and employment have all surpassed expectations in recent months.
Figures out earlier showed Australian job advertisement surged to their highest in 12 years in March, jumping 7.4% from the previous month.
The RBA said it ‘will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”
Record low interest rates have also lit a fire under the country’s housing market where prices soared at the fastest pace in three decades in March.
Some analysts expect financial regulators to impose stricter macro-prudential rules this year to help rein in risky lending behaviour by banks.
The RBA will release its biannual Financial Stability Review on Friday where it will highlight the risks facing the financial system as well as trends in the sector.
(Reporting by Swati Pandey; Editing by Shri Navaratnam)