SYDNEY, Oct 17 (Reuters) - Australia's central bank sees no need...

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    SYDNEY, Oct 17 (Reuters) - Australia's central bank sees no need to follow its peers abroad and raise interest rates, noting price pressures remained subdued across the economy while households laboured under a heavy load of debt.

    Minutes of the Reserve Bank of Australia's (RBA) October meeting showed the policy-making board would not be rushed into matching policy tightening elsewhere.

    "Members observed that moves towards higher interest rates in other economies were a welcome development, but did not have mechanical implications for the setting of policy in Australia," the minutes showed.

    Any move in rates would be dependent on the domestic economy, where inflation and wages remained subdued.

    The Board also noted that policy in other rich nations had been eased "significantly more" than in Australia, where rates had been held at 1.5 percent for over a year.

    Central banks in the United States and Canada have already hiked this year, while the Bank of England has flagged the chance of a tightening.

    The head of the RBA, Philip Lowe, last month said it was more likely than not that the next move in domestic rates would be upward but that it would not happen for some time yet.

    Tuesday's minutes showed the RBA had also softened its objections to a higher Australian dollar by adding the caveat "material" to its usual warning on the currency.

    "A material further appreciation of the exchange rate would be expected to result in a slower pick-up in economic activity and inflation," the minutes showed.

    The local dollar is presently just under $0.7900 , having fallen back from atop $0.8000 a couple of months ago.

    The central bank's economic outlook was guardedly optimistic, noting that strong jobs growth across the country was supporting household incomes and spending.

    Spending on public infrastructure was also rising "very strongly" and would likely support economic growth for another couple of years.

    Inflation, however, remained tame and the bank's liaison with firms suggested many would be absorbing sharp increases in energy prices into their margins rather than passing them on.

    Conditions in the once-hot housing markets of Sydney and Melbourne were easing, due in part to tighter lending rules imposed by regulators.

 
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