The current mildly restrictive stance of monetary policy remains "appropriate", the Reserve Bank has claimed.
At its monthly board meeting today, the Reserve Bank decided it was prudent to leave the cash rate on hold at 4.25 per cent after dropping the cash rate twice in two months at the end of last year.
While the announcement will no doubt shock a few industry pundits, with many economists pencilling in a 25 basis point rate cut in February, Deloitte Access Economics Chris Richardson said he wasn't surprised to see the Reserve Bank "err on the side of caution".
Last week, Mr Richardson told The Adviser that the sticky tape keeping Europe together was holding up quite well, thus eliminating the need for an immediate rate cut.
"The rate cuts haven't necessarily stimulated the property market as the RBA would have hoped. So the Board may prefer, moving forward, to leave rates on hold and see what happens in Europe," he said.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186 Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and related entity of DPN. Credit for Dream Big 100% Offset and Work Smart 100% Offset is provided by Adelaide Bank a division of Bendigo and Adelaide Bank Ltd, ABN 11 068 049 178 and Australian Credit Licence 237879.