The Reserve Bank dropped the cash rate twice in the last two months of the year 2011 in the hopes that it will create a dramatic change to the falling property market status. As it has been decided in the monthly board meeting lately, the monetary policy shall be held at its current rate of 4.25 percent without any more dropping.

The Reserve Bank claims that the present policy of 4.25 percent rate is quite appropriate. Although some economists will be surprised with this declaration, it is not at all surprising for Reserve Bank to be cautious with the European market status.

The European financial market has been experiencing improvements since December 2011. Although there is still much to be done to keep European banks in full confidence in the financial market, Europe has been doing well in keeping its balance.

The successive rate cuts of the Reserve Bank has done a little in enhancing the property market status thus, there is no need for further rate cuts in the time being.

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