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Members of the Reserve Bank of Australia's monetary policy meeting agreed that the country's gross domestic product continued to expand at a healthy rate, despite expectations for moderation, minutes from the bank's October 2 meeting revealed on Tuesday.
Financial stability risks were broadly unchanged from three months prior, the minutes showed. Global economic conditions continue to be positive, although downside risks remain.
The appreciating U.S. dollar provided a healthy boost to Australian exporters and fostered domestic growth, the bank said.
"Members assessed that it would be appropriate to hold the cash rate steady and for the bank to be a source of stability and confidence while this progress unfolds," the minutes said.
At the meeting, the bank voted to maintain its benchmark lending rate at the record low 1.50 percent - where it has been since August 2016. Policymakers reiterated that the low level of interest rates is continuing to support the Australian economy.
Although further progress in reducing unemployment and having inflation return to target is expected, this progress is likely to be gradual, the bank repeated the view it expressed in September.
According to the RBA, the outlook for the labor market remains positive. The improvement in the economy should see some further lift in wages growth over time.
"Members assessed that the current stance of monetary policy would continue to support economic growth and allow for further progress to be made in reducing the unemployment rate and returning inflation towards the midpoint of the target," the minutes said.
Inflation is around 2 percent. The central forecast is for inflation to be higher in 2019 and 2020 than it is currently.
The national accounts confirmed strong economic growth of 3.4 percent in the second quarter. The bank forecast a bit above 3 percent growth in 2018 and 2019.
However, one continuing source of uncertainty is the outlook for household consumption. Growth in household income remains low and debt levels are high.
On property market, the bank said conditions in the Sydney and Melbourne housing markets have continued to ease and nationwide measures of rent inflation remain low.
Growth in credit extended to owner-occupiers remains robust, but demand by investors has slowed noticeably as the dynamics of the housing market have changed.
"Housing credit growth had declined, largely as a result of a sizeable slowing in demand from investors. Some lenders had increased their standard variable housing lending rates by small amounts in response to higher money market interest rates, although housing lending rates had been reduced for some new loans," the minutes said.
