RBA leaves cash rate on hold at 2% for February

The Reserve Bank of Australia has left the official cash rate unchaged at 2% for the month of February. 

The bank decided that leaving the cash rate unchanged was the best course of action because monetary policy needs to be accommodative when inflation is restrained. 

The official cash rate was last cut in May by 25 basis points, with the bank keeping the rate on hold now for nine consecutive months. 

RBA governor Glenn Stevens said in a statement this afternoon low interest rates and regulatory measures are helping to “contain risks in the housing market”. 

“Credit growth to households continues at a moderate pace, albeit with a changed composition between investors and owner-occupiers,” Stevens said.

“The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities. The exchange rate has continued its adjustment to the evolving economic outlook.” 

However, Stevens also left the possibility of a future cut to the official cash rate open. 

“Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand,” he said.