2017.02.2323:28:00UTC+00RBA head intends to retain household spending

Reserve Bank of Australia Governor Philip Lowe emphasized he wants to make sure households will not be pressured to reduce spending, flagging the threats of low interest rates as it entices them to secure so financing.

The RBA head said Friday the majority of households with borrowings seem to get by. However, he noted the current high debt level, coupled with low nominal income growth, influences them to spend, which is somehow seen in the consumption numbers.

Since he took the post in September, Lowe has managed to keep rates at a record low of 1.5%. He was worried further easing will beef up already costly house prices and encourage more perilous lending and borrowing that jeopardizes financial stability.

The central bank expects the economy to surge 3% this year, ignited by resource exports and a dwindling expansion from slumping mining investment.