15.09.201422:40:00UTC+00Australia C.bank Minutes: Most Prudent Course Likely to be a Period of Stability for Rates

In minutes of its Sept. 2 meeting, where the Reserve Bank of Australia (RBA) kept its cash rate steady at 2.5 percent for a 13th straight month, the bank reiterated that the most prudent course was for a period of stability in rates.
"Accommodative monetary policy was supporting demand in some sectors of the economy, but policy also needed to be cognisant of the risks to future growth that could accompany a large further build-up in asset prices, particularly if that was associated with an increase in leverage," the minutes said.
"For investors in housing, the pick-up in housing credit growth had been more pronounced than for owner-occupiers, with investor demand particularly strong in Sydney and to a less extent in Melbourne," it said.
"Members further observed that additional speculative demand could amplify the property price cycle and increase the potential for property prices to fall later."
The central bank again cited the Australian dollar as a drag on the economy since it remained "above most estimates of its fundamental value."It would therefore likely be content that the exchange rate has taken a spill in the last week or so, losing four U.S. cents to stand around $0.9025.

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