Interest rates stay on hold in Cup Day decision

The Reserve Bank has kept interest rates on hold for another month, at 2.5 percent.

The RBA moved the cash rate on five out of six of its previous Melbourne Cup Day board meetings up to 2011, but has not moved on Melbourne Cup day since.

None of the 14 economists surveyed by AAP before the announcement expect that trend to change, with all forecasting no move in the cash rate before the end of 2014.

The rate has remained unchanged since August 2013, but an increase is expected to come some time next year, with 12 of the economists surveyed saying there will be a rate hike in 2015.

Earlier, HSBC chief economist Paul Bloxham said the record low cash rate is doing its job, but it is also creating risks in the housing market as home prices surge.

"After a long period in which Australia was building mines and too few houses, there is now a strong pipeline of housing construction," he said.

The RBA is working with regulators on potential changes to lending rules to address the rapid rise in loans to housing investors, who are pushing up prices and making it more difficult for owner occupiers and first-home buyers.

Mr Bloxham said the introduction of new regulations to put a lid on housing prices in Sydney and Melbourne will allow the RBA the keep the cash rate unchanged until mid 2015.