By TraderVox.com
The Reserve Bank of Australia indicated in its semiannual financial stability review that the large share of households with mortgage prepayment buffers, income growth, and low unemployment rate signal that most households are able to meet their debt obligations. The review also highlighted that the mining industry, which has kept Australian economy from recession for the last 21 years, has slowed down posing a risk to the economy. The statement noted that the Australian consumers took more debt that their American counterparts. With the highest interest rates among the major developed nations, policy makers in Australia have exuded confidence in the RBA’s ability to cope with economic shocks that might be as a result of global economy.
Talking about the RBA semiannual financial review, Ben Jarman said that report shows that households in Australia have enough “shock-absorber” in case there in case of income. Jarman, who is a JPMorgan Chase & Co Chief Economist in Sydney, added that the report have revived optimistic sentiments from those people who were downbeat about the economy. The report also showed that the business credit rose by 6.5 percent annualized rate in the last six months ending July. This is a reverse from the previous half a year rate which showed a decline. This has been construed as a change in companies’ appetite for debt, which is seen as increasing.
However, the report noted that credit growth in the country may remain subdued since banks are set to miss their high profits they have been used to. The central bank warned against financial institutions’ addition of new products in the market or loosening their lending standards.
Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management.
Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox