MNI POLICY: RBA Lowe Reiterates Next Cash Rate Move Likely Up

By Sophia Rodrigues

     SYDNEY (MNI) - The next move in the cash rate will be up, not down, if the

economy continues on the current improving track, Reserve Bank of Australia

Governor Philip Lowe said Monday in his remarks at a breakfast event to launch

ASIC's National Financial Capability Strategy in Canberra.

     Following are the key observations we made from the speech:

     --There was no new information of interest to financial markets in the

remarks which appeared to be directed mainly at households. Lowe used the

opportunity to reiterate his optimism on the economy. He said the economy has

been improving. "If we continue on this current improving track, as we expect we

will, it is likely that the next move in official interest rates will be up, not

down," he said.

     --Lowe said housing prices don't always go up and like interest rates, they

go up and down. He pointed to the fall in prices in Sydney and Melbourne at the

moment. "While I would expect housing prices to trend higher over time as our

incomes increase, there is no guarantee that your home will be worth more

tomorrow than it is today. So plan accordingly," he advised.

     --Lowe said that as the central bank, the RBA has a very strong interest in

people being in control of their financial lives and making well-informed

choices. "I say this from the perspective of the individual and the economy as a

whole."

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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