RBA could cut interest rates in May

Tuesday 17 April 2012

Article by Mozo

The Reserve Bank of Australia (RBA) maintained interest rates at the start of this month (April) despite the lacklustre performance of the country's property market.

RBA may consider rate cut next month

However, minutes from the last meeting hint at a potential rate cut in May.

Economists will no doubt be looking at short-term inflation levels before making predictions about any future course of action the bank may take, but one of the concerns is that the construction levels and home loan approvals have tanked somewhat – despite a healthy dose of price stability in the property market.

In the minutes of the RBA's latest meeting, which were published today (April 17th), experts noted: "New dwelling construction had fallen in the December quarter and there was little sign of a pick-up in building or loan approvals."

And it is not just the property market that is suffering. The Australian Bureau of Statistics recently released figures showing that the number of business loans approved in February was markedly lower than in January – hinting that there could be subdued levels of growth in the coming year.

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