Rates will stay low due to macroeconomic factors: RBA governor

Sydney

AUSTRALIA'S economy has spare capacity and contained inflation that justify loose monetary policy, and would benefit from an extended period of housing construction growth, central bank Governor Glenn Stevens said.

"The level of interest rates, although very low, is well warranted on macroeconomic grounds," Mr Stevens said in the text of a speech to a function in Melbourne on Tuesday. "But for accommodative monetary policy to support the economy most effectively overall, it's helpful if pockets of potential over-exuberance don't get too carried away."