The review noted highly-indebted Australian households would face risks from rising interest rates.
The Reserve Bank of Australia has identified risks that higher interest rates and rising inflation pose to highly indebted Australian households in its latest Financial Stability Review published on Friday.
The FSR notes that household debt relative to income is high in Australia compared with other countries, and while most households are well placed to meet higher debt payments there was also a risk of reduced of consumer spending, see: MNI INSIGHT: Market Rates Pricing Races Ahead But RBA Cautious.
The RBA also notes that higher interest rates are likely to trigger declines in property prices and the value of financial assets. The comments come as the RBA appears set to raise interest rates at its June meeting from the current record low of 0.10% and Australian inflation gains momentum, and the job market tightens.