Published: September 06, 2021
Since the last rate rise, Australian house prices have risen so much that levels seen in the past would wreck the economy
Later on Tuesday the board of the Reserve Bank of Australia will decide if it will keep buying government bonds at its current rate of $5bn a week. But it will not be considering raising the cash rate – and it’s been so long since interest rates were raised that what was once a “neutral rate” has become much lower.
When the pandemic hit, the RBA knew it needed to do something extraordinary. And so, aside from cutting the cash rate to 0.25% and then 0.1%, it also began a massive amount of government bond purchases. This essentially puts more money into the economy and spurs growth.
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