Interest rates will remain low for years: RBA Governor

Interest rates will remain low for a few more years, Reserve Bank Governor Glenn Stevens has indicated in an address to the Committee for Economic Development of Australia.

According to AAP, Stevens said rates would likely remain low for an extended period, or until investment from outside of the mining industry picked up.

"Inflation is well under control and is likely to remain so over the next couple of years," Stevens said.

"In such circumstances, monetary policy should be accommodative and, on present indications, is likely to be that way for some time yet."

His comments come after the RBA left the official cash rate at a steady 2.5% for the 15th consecutive month at the November Board meeting.

However, Stevens expressed concern about the potential for an “overexcited” housing market, due to low interest rates, advocating for the revision of bank lending policies proposed by the RBA’s Financial Stability Review released in September.

Stevens also responded to British Prime Minister David Cameron’s address to the Australian Parliament on Friday, in which he congratulated Australia for surviving 23 years without a recession.

Fairfax Media reported that Stevens disputed that claim, criticising the current method by which recessions are measured (most commonly as two consecutive quarters of negative economic growth).

"I think but for the vagaries of quarterly national accounting we might well have called the end of 2000 a recession. We would have called the end of 2008 one, in fact I would call it that,” he said.

"It wasn't terribly deep and we got out of it fairly quickly. The question isn't how you can go another 23 years without a recession, it is how you have small ones and get out of them quickly. That's a conversation worth having."