RBA: On hold, as growth is picking up – HSBC

Paul Bloxham, Chief Economist at HSBC, takes a note that the RBA left its cash rate unchanged at 1.50%, as expected.

Key Quotes

“The post-meeting statement, once again, noted that the economy is evolving largely as expected and that the current stance of policy is consistent with ‘sustainable growth in the economy and achieving the inflation target over time’. The statement also noted that non-mining business investment has risen over the past year.”

“The pick-up in non-mining business investment is, in our view, the last stage of the rebalancing of growth at the end of the mining boom. The RBA continued to note its concern about the recent pick-up in borrowing for housing by investors but re-iterated that ‘supervisory measures have contributed to some strengthening of lending standards’. We expect the RBA to keep its cash rate steady at 1.50% through 2017 before lifting it in Q1 2018.”