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HIA reveals concern over RBA decision
Released 8 February 2012

The Reserve Bank Board's decision to keep interest rates on hold at 4.25 per cent in February, is a missed opportunity to bolster business and household confidence, according to the Housing Industry Association.     

“A rate cut would have been appropriate for current economic conditions, but sadly that decision was not taken,” HIA Chief Economist Harley Dale said.

“The global and domestic economic outlook remains clouded, within which new housing activity in Australia faces the risk of re-visiting GFC lows.

He said the lack of movement follows widespread expectation for a cut and an increasingly aggressive debate regarding what Australia’s banks would and should do with such a cut.

“Against this backdrop, leaving rates unchanged has the potential to weigh down on confidence and non-resource economic activity.”

He said despite the RBA’s decision, it would be helpful if our banks moved to provide some further interest rate relief to Australian businesses.