The Reserve Bank has left interest rates on hold at a record low 1.5 per cent for the seventh straight month.
The decision not to shift rates was anticipated by all 67 economists surveyed by Reuters ahead of the meeting.
Indeed, this month’s meeting was one of the most unanticipated in recent times, after the bank’s governor Philip Lowe made two appearances a fortnight ago where he all but committed to steady interest rates for the foreseeable future.
In a speech to an Australian-Canadian business audience in Sydney late last month, Mr Lowe candidly revealed the dilemma the central bank’s officials faced.
“We’d like the economy to grow a bit more quickly and we’d like the unemployment rate to come down a bit more quickly than is currently forecast,” he said.
“But if we were to try and achieve that through monetary policy it would encourage people to borrow more money and it probably would put more upward pressure on housing prices and, at the moment, I don’t think either of those two things are really in the national interest.”
The governor’s post-meeting statement was more guarded than his public comments, and little changed from last month’s.
However, JP Morgan’s Sally Auld observed that one small change around home lending standards is a possible indication a further property investor crackdown is coming.
“It reads as an acknowledgement that the current supervisory regime is doing something to improve lending standards, but not enough,” she wrote in a note on the decision.
“With the unemployment rate unchanged over the last year and at least 0.5 percentage points above NAIRU [the non-accelerating inflation rate of unemployment] and core inflation forecast to remain sub-2 per cent for at least the next two years, rate hikes are clearly not the appropriate tool to manage these risks.
“So our interpretation would be that this opens the door to something more on the macro-prudential front at some point, although the timing and nature of any change are unclear.”
The banking regulator APRA started a crackdown on property investor lending in late-2014.