Despite the fact that most economists anticipated a 25 basis point cut of official interest rates this week, the Reserve Bank (RBA) made no change to the cash rate at its first board meeting of the year. As a result, official interest rates remained at 4.25%. In the board’s statement they made mention of the fact that credit growth remains modest, though there has been a slight increase in demand for credit by businesses. They also noted that housing prices showed some sign of stabilising at the end of 2011, after having declined for most of the year. According to the RP Data-Rismark Home Value Index, capital city values fell by -0.5% in the December 2011 quarter after -0.8% quarterly falls in September and June and a -1.5% quarterly fall in March 2011.
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