HIA expresses concerns over interest rates

HIA expresses concerns over interest ratesThe Housing Industry Association (HIA) in Australia has expressed concerns over the decision by the country's central bank to hold the interest rates for another month.

The Reserve Bank of Australia (RBA) said yesterday that it will keep the cash rate unchanged at 2.75 per cent for another month. HIA senior economist Shane Garret pointed out that this will result in continuing slowdown in the residential construction industry in the country. He said that as the mining sector in eth country is facing a slowdown, it is important that the housing construction industry picks up growth to compensate for the slower growth in the economy.

"The scope for further reduction on the cash rate exists, despite the RBA's concerns about inflation. It must be remembered that the inflationary impacts of the recent dollar decline will be limited by the considerable slack that exists across sections of the economy as well as the use of fixed price contracts with suppliers," said Mr Garret.

He said that while low interest rates encourage customers, the business have to cover up their interest rate costs He added that there is still scope for a reduction in cash rate even as there are some concerns over inflation.