[Sydney 30th Reuters]-The Reserve Bank of Australia (Central Bank, RBA) has announced its business plan for FY2019 / 20 (from July 2007), and the country's high-level household debt weakens the shock resistance of the economy Expressed his view that it could complicate future interest rate decisions.
In the country, the household boom continued until 2017, and household debt increased and the ratio to income exceeded 190%, setting a record high. In response, regulators embarked on tighter lending regulations, leading to a sharp drop in housing prices.
The recent deterioration in housing market conditions and slow income growth have put pressure on household financial conditions and consumer spending, which has been a major factor in the central bank's two rate cuts since June.
“The asset value and leverage movements may have become more important in economic trends than in the past, given that debt is already at a high level in the household financial balance,” he said.
“Especially given the weak growth in household income, high levels of debt can weaken resilience to economic shocks and complicate future monetary policy decisions.”
The central bank pointed out that the country's financial system is highly resilient, supported by the strong performance of major domestic banks and rising capital adequacy ratios. “Continued to watch carefully” the trend of residential mortgages and the risks posed by high levels of household debt.
In order to respond to any risk in the financial system, the regulator has stated that it is “ready to consider further measures”.
He reaffirmed that flexible medium-term inflation targets are at the heart of the central bank's monetary policy framework.
