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RBA plays down investor lending concerns

By James Mitchell
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Reserve Bank of Australia governor Glenn Stevens has played down concerns regarding investor finance growth after the central bank left the cash rate steady for another month.

In a statement announcing the outcome of the RBA's board meeting on Tuesday, Mr Stevens said credit is seeing moderate growth overall.

“Growth in lending to investors in housing assets is stronger than to owner-occupiers, though neither appears to be picking up further at present,” he said.

However, Mr Stevens noted that business lending had been strengthening.

While he acknowledged that dwelling prices continue to rise strongly in Sydney, the RBA governor said price trends had been more varied in other cities.

Despite the falling dollar, a lower exchange rate is likely to be needed to achieve balanced growth in the economy, Mr Stevens said.

“At today's meeting the Board judged that it was appropriate to hold interest rates steady for the time being.

“Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target.”

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