STEPHEN McMAHON October 30,  20128:08PM - Daily Telegraph

LOW interest rates are not something Australia should aspire to, a senior  Reserve Bank board member says.

In a clear indication the RBA may look to postpone its widely expected  Melbourne Cup Day rate cut, deputy governor Philip Lowe said there were some  signs the Australian property market is recovering and unemployment is  relatively low.

Despite most homeowners using the recent interest rate cuts to pay down debt,  Mr Lowe believes Australia is well positioned to meet the challenges of global  uncertainty.

The more "positive tone" of Chinese economic data in recent weeks was seen as  a major bonus and may led to the RBA putting on hold any plans for another  cut.

"It is not inconceivable that strong growth in Asia, driven by domestic  demand, could continue despite the problems in the advanced economies," Mr Lowe  said.

"Australia obviously has a very strong interest in this outcome, not least  because we have benefited more from the growth in Asia than any other advanced  industrialised economy.

"The uncertainty over how Europe will resolve its debt and banking problems  and the looming fiscal cliff in the US is however continuing to weigh on  Australian consumer sentiment, he said.But Mr Lowe was positive Australia was well positioned despite the recent  global uncertainties and high Australian dollar.

"The economy has recorded solid growth, the unemployment rate remains  relatively low, inflation is consistent with target, public debt is low and the  banking system is sound. Few countries can make such claims," he said.But he also warned that while the quantitative easing by US Federal Reserve,  Bank of Japan and European Central Bank have been good so far its long-term  implications are yet to be fully understood.

Since November, the RBA has cut the cash rate by 1.5 per cent - to 3.25 per  cent - its lowest level in 3 years.

Written by NicoleSmith,
Tuesday October 30, 2012

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