The Reserve Bank of Australia (RBA) has expressed optimism that record-low interest rates, the weaker Australian dollar and the continuous property market boom are doing the country’s economy good.
Deputy governor Philip Lowe claimed that the RBA's move to slash rates last month was not because "things had turned for the worse", but because of a lack of compelling signs of a pick-up in economic growth.
Lowe told the audience at the Goldman Sachs annual global macro-economic conference that there were signs that the weaker Australian dollar was boosting the economy. He added that businesses are telling the central bank it was opening up new opportunities.
"The Reserve Bank Board has responded to a softer economic outlook by having interest rates lower than otherwise," Lowe said.
He also noted the positive numbers from the housing construction industry, saying that low rates drive this boost, which in turn provides employment growth. Homewares are also experiencing higher sales – thanks to the housing construction industry, he said.
However, Lowe maintained the situation should still be closely monitored.
"The higher asset prices are helping to support the economy, although they need to be watched carefully, particularly where they are accompanied by higher borrowing," he said.