Recovery 'not enough' to raise interest rates

Interest rates were kept at a 49-year low despite positive projections for the economy, it has been suggested.

According to the recently published minutes of the Reserve Bank of Australia’s monetary policy meeting earlier this month, prospects for the country’s finances look good.

It stated there is an increasing amount of consumer and business confidence, as well as a rise in investments and exports.

Furthermore, there was a noted boost to the sentiment in financial markets, with competition over term deposits being witnesses, as well as term interest rates.

However, the decision was made to keep interest rates at three per cent, which could have been welcome news to those looking for low interest home loans.

The minutes revealed the decision to maintain the rate at a 49-year low was taken so as to balance the risk posed by the international economy and to avoid "prematurely tightening and adversely affecting confidence and demand".

Meanwhile, the National Australia Bank recently predicted there would be two more rate hikes before Christmas.

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