RBA to 'look beyond extreme weather when setting interest rates'

As it decides future interest rates, the Reserve Bank of Australia (RBA) has said it will take account of the recent extreme weather conditions seen in the country but use a medium-term approach in its calculations.

The body made the announcement in its March board meeting, the minutes revealed, where it acknowledged the effect on the economy as a result of the climes, News.com.au reports.

This may be reassuring for those searching for low interest home loans, as it could indicate better rates than expected are to come.

Attendees of the RBA meeting referred to the floods that hit parts of Australia in recent months and said the overall economy was growing at a close-to-trend level.

"Members confirmed that the board's approach would be to look through the temporary effects caused by extreme weather events and to continue to set monetary policy based on the medium-term outlook for growth and inflation," it confirmed.

In the a recent meeting over the monetary policy, governor Glenn Stevens announced the cash rate would stay unchanged at 4.75 per cent, adding that there has been strong growth in the Asian economy.

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