Reserve Bank of Australia Leaves Cash Rate Unchanged For Melbourne Cup

03/11/2015 2:47 PM AEDT | Updated 15/07/2016 12:50 PM AEST
People walk past the Reserve Bank of Australia building in Sydney, Tuesday, Dec. 4, 2012. The Reserve Bank of Australia's decision to lower the rate to 3 percent marked the bank's fourth rate cut this year and was widely predicted by economists. (AP Photo/Rick Rycroft)

The Reserve Bank of Australia has held the cash rate for November at 2 percent despite the fact financial markets had been preparing for a cut.

Governor of monetary police decisions Glenn Stevens said the board took Australia's Asia-Pacific neighbours into account when making the decision.

"The global economy is expanding at a moderate pace, with some further softening in conditions in the Asian region, continuing U.S. growth and a recovery in Europe," Stevens said in a statement.

"Key commodity prices are much lower than a year ago, in part reflecting increased supply, including from Australia."

Stevens addressed the big four banks' decision to increase interest rates, saying conditions were still active.

"Low interest rates are acting to support borrowing and spending," Stevens said.

"While the recent changes to some lending rates for housing will reduce this support slightly, overall conditions are still quite accommodative.

"Credit growth has increased a little over recent months, with growth in lending to investors in the housing market easing slightly while that for owner-occupiers appears to be picking up.

"Dwelling prices continue to rise in Melbourne and Sydney, though the pace of growth has moderated of late. Growth in dwelling prices has remained mostly subdued in other cities."

There is no link between the Melbourne Cup and the cash rate, other than the fact both events happen on the first Tuesday of November.

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