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Dominick Stephens: Reserve Bank urged to focus on business sector instead of housing market

Published: Nov. 10, 2020, 8:41 p.m.

The Reserve Bank is being told it needs to put out the fire in the housing market and light one under the business sector.
The Bank's regular Monetary Policy Statement is due at 2pm this afternoon.
Westpac chief economist Dominick Stephens expects the Official Cash Rate will stay at 0.25 percent.
But he told Mike Hosking the central bank should restrict the Funding for Lending Programme, to businesses.
"It's sparked a house price boom which could threaten financial stability, and even the Reserve Bank's licence to operate monetary policy."
Stephens says through the Funding for Lending Programme, the central bank will probably give banks incentives to lend more to businesses, rather than homeowners.
However, he says there's not a lot of demand out there for business loans at the moment.
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