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Australia CB Chief Sees Rates Stable

Australia CB Chief Sees Rates StableAustralia CB Chief Sees Rates Stable

Australian Central Bank Governor Philip Lowe said he expects “a period of stability” in interest rates and suggested further cuts could push already high household debt to “dangerous” levels, Bloomberg reported. “The issue we’re discussing, internally, is how much extra fragility would that mean in the economy with household debt already at a record high,” Lowe said in testimony to a parliamentary panel Friday in Sydney. “Is it really in the national interest to get a little bit more employment growth in the short run at the expense of creating vulnerabilities which would become quite dangerous in the medium term?” Lowe has kept rates unchanged at a record-low 1.5% since taking the helm in September, resisting calls for further easing in response to weak inflation. He’s concerned further cuts will send already stratospheric Sydney house prices even higher and encourage riskier lending and borrowing to finance purchases and threaten financial stability.

 

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