Reserve Bank keeps rates on hold at 1.5pc for record 23rd month

The Reserve Bank Board has left the official interest rate unchanged at 1.5 per cent for a record 23rd month in a row.

Pedestrians walk past the Reserve Bank of Australia in Sydney. Picture: AAP

The Reserve Bank Board has left the official interest rate unchanged at 1.5 per cent for the 23rd month in a row today, staring down calls to return rates to higher levels.

The 11-member board, as expected, left the cash rate unchanged, citing an uncertain global outlook. The chance of an official increase in interest rates has steadily fallen this year, as house prices in Sydney and Melbourne start to decline and jobs growth slowed.

“One uncertainty regarding the global outlook stems from the direction of international

trade policy in the United States. There have also been strains in a few emerging market

economies, largely for country-specific reasons,” RBA Governor Philip Lowe said in a

statement.

The RBA expects an acceleration in wages growth and inflation over time, but the

process will be slow.

This morning, prices in financial markets implied the chance of an increase before April next year was 16 per cent. The Australian dollar has come close to falling below US73 cents for the first time this year in recent days.

With the cash rate unchanged since it was cut by 0.25 percentage points to 1.5 per cent in August 2016, the central bank hasn’t adjusted interest rates for 23 months or 21 consecutive meetings, the longest stretch of stable monetary policy in Australia since the Reserve Bank first started announcing its policy adjustments in 1990.

Separately, the ABS said home approvals fell 3.2 per cent in May, more than economists had expected, and the second consecutive monthly decline. “Weakness in private housing approvals was well distributed across the major states, though particularly notable in Queensland, which registered a 20 per cent fall over the month,” an analyst said at JP Morgan.