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Australia's Rba Considered Delaying Rate Cut - Nasdaq.com

The RBA cut interest rates by one quarter of a percentage point at the start of the fitness month to a record low 2.25%, its first cut since August 2013, citing falling global interest rates, weak domestic growth and the risk of rising unemployment. Many in the continue financial markets were not expecting the cut in as RBA Governor Glenn Stevens had indicated as recently as December that interest rates stability remained an attractive option. Financial markets are now betting the RBA will cut interest rates at least one more time by mid-2015, with some market participants expecting it will continue cutting in the second half of the year. Still, there was little guidance in the minutes on how the RBA might proceed. To be sure, the RBA indicated it might move cautiously in cutting interest rates further saying it will need to keep a close watch on house price growth. "Given the large increases in housing prices in some cities and ongoing strength in lending to investors in housing assets, members also agreed that developments in the housing market Max Workouts would bear careful monitoring," it said. The RBA and the Australian Prudential Regulation Authority have warned about risks associated with strong house price gains. APRA announced in December new guidelines for lending to property investors. The RBA said it would be important to assess the effects of these measures.
More: http://www.nasdaq.com/article/australias-rba-considered-delaying-rate-cut-20150216-00343

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