Reserve Bank of Australia keeps rates steady, waits for past cuts to take effect

The Reserve Bank of Australia (RBA) had its interest rates untouched on Tuesday and said it was waiting for the past three implemented rate cuts to take effect in the sluggish economy. However, markets see the need for more rate cuts to drive more economic activities.

The central bank of Australia just concluded its last board meeting for the year and left doors wide open for another cut in its 0.75% cash interest rate.

“The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy,” RBA Governor Philip Lowe said.

“The Board also agreed that due to both global and domestic factors, it was reasonable to expect that an extended period of low-interest rates will be required in Australia.”

Meanwhile, annual growth is expected to go up to 1.7% form a ten-year low of 1.4%. Lower borrowing costs have stirred markets to boost home prices, which bested its performance in November for 16 years. This was capped by boom-like gains in Sydney and Melbourne.