The Reserve Bank of Australia has kept official interest rates on hold despite admitting inflation remains in check and the economy is growing below trend.
As the US Government shutdown because of a Congress impasse over the American budget, the Reserve Bank board decided to leave its key interest rate at 2.5 per cent.
In a statement, governor Glenn Stevens said the economy was “growing a bit below trend” which is likely to continue for some time.
Unemployment had edged higher and inflation was within the Reserve Bank’s target band.
In a nod to the impact of lower rates on the housing sector, Mr Stevens said values in some parts of the economy would continue to grow.
“The easing in monetary policy since late 2011 has supported interest-sensitive spending and asset values,” he said.
“The full effects of these decisions are still coming through, and will be for a while yet.”
Mr Stevens again mentioned the Australian dollar which has lifted in value slightly over recent months.
“A lower level of the currency than seen at present would assist in rebalancing growth in the economy,” he said.
The decision follows new figures from RP Data-Rismark which showed house values nationally hit an all-time high through September.
While values across Perth edged down by 0.1 per cent, they soared by 2.5 per cent in Sydney and by Melbourne by 2.4 per cent.
Over the past three months the value of Sydney dwellings grew by 5.2 per cent while in Melbourne they lifted by five per cent.
At annualised rates they suggest value growth of more than 20 per cent.
There was no mention of the events in the United States where the government there shutdown for the first time since 1996.There are warnings the shutdown, depending on its length, will have a major economic impact on the US and globally.