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