RBA warns of rising financial stability risks, households under pressure

In its semi-annual financial stability review, the Reserve Bank of Australia (RBA) on Friday warned financial stability risks have increased over recent months.

The RBA said as interest rates rise, pressures on Australian household budgets and business cashflows are also rising while housing prices are declining.

"Financial stability risks would be magnified by a further substantial tightening in global financial conditions," said the RBA in its 70-page review.

"The outlook for financial stability over the coming years will hinge in large part on the ability of households and businesses to weather challenging economic conditions both in Australia and internationally," said the RBA.

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