RBA keeps rates on hold for third month

INTEREST rates have stayed in a holding pattern, after the Reserve Bank on Tuesday decided to keep the cash rate steady at 2.25% for the third month running.

RBA Governor Glenn Stevens wrote domestic growth was steady at below-trend rates, with demand still weak as business spending was falling.

He wrote the bank decided to hold rates at the record lows due to rising unemployment, "spare capacity" in the economy and subdued labour costs growth.

While property prices in Sydney were still rising, prompting city concerns about a potential housing bubble, the board noted in other cities, property prices were "more varied".

However, Mr Stevens noted the major growth home finance lending was going to investors, rather than owner-occupiers, but neither appeared to be "picking up at the moment".


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