Last Tuesday the Reserve Bank decided to leave the cash rate unchanged at 1.50 per cent.
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The decision was backed by several observations that reflect that the Australian economy is tracking relatively well.
Australian money-market interest rates are higher than they were at the start of the year, and while they have not fed through into higher interest rates on deposits, some lenders have increased mortgage rates by small amounts (the average mortgage rate is still lower than a year ago).
The Bank is tipping the Australian economy to grow a bit above 3 per cent in 2018 and 2019, supported by higher levels of public infrastructure investment and growth in resource exports.
Household income has been growing slowly but debt levels are high.
The drought has led to difficult conditions in parts of the farm sector.
The unemployment rate has fallen to 5.3 per cent, the lowest in almost six years, and is expected to drop to around 5 per cent.
Conditions in the Sydney and Melbourne housing markets have continued to ease and rent inflation remains low.
Housing credit growth has declined to an annual rate of 5½ per cent, largely due to reduced demand by investors.
Lending standards are also tighter than they were a few years ago, partly reflecting APRA's earlier supervisory measures to help contain the build-up of risk in household balance sheets.