Reserve Bank governor Glenn Stevens says interest rates will remain low for the foreseeable future, assuming that pockets of potential exuberance in the housing market remain in check. Stevens, in a speech to the Committee for Economic Development in Melbourne this week, said the nation needed stronger growth outside the resources sector, which justified low interest rate settings. Inflation is well under control and is likely to remain so over the next couple of years, he said. In such circumstances, monetary policy should be accommodative and, on present indications, is likely to be that way for some time yet. But for accommodative monetary policy to support the economy most effectively overall, its helpful if pockets of potential over-exuberance dont get too carried away. The RBA has been keeping close tabs on the housing industry to make sure prices and credit demand stay within reasonable bounds. - Via Terry Ryder
Posted on: Sat, 22 Nov 2014 01:33:00 +0000
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