the target over the next one to two years. taking account of the evolving outlook for growth and inflation, the board eased monetary policy further in the last quarter of last year, following up its easing actions in mid year, and earlier actions in the last quarter of 2011. the cash rate has been reduced six times over the past sixteen months, for a total decline of 175 basis points. allowing for some change in the gap between the cash rate and other rates, lending rates nonetheless have fallen to be not far from their historic lows. the share of household income devoted to interest payments has bis central bankers ’ speeches likewise declined considerably. indeed housing “ affordability ” as conventionally measured, for purchasers, has improved a lot over the past two years. that represents quite a substantial change in policy settings. it is having an effect. housing prices have been rising since last may, having declined for a period prior to that. share prices have also risen quite significantly, and if anything by a little more than in comparable markets overseas. the returns available to savers on safe assets – like bonds and bank deposits – have fallen by enough to prompt australian savers to consider shifting their portfolios towards other assets. these are channels of monetary policy at work. at the same time, as we have noted repeatedly, the exchange rate remains somewhat higher than one might have expected given the decline in export prices so far observed. this has been a relevant factor in the setting of interest rates. it is not that interest rates are seeking a particular exchange rate response, but they are being set with a recognition of the exchange rate ’ s effect on the economy. overall, there is a good deal of interest rate stimulus in the pipeline. at its meeting earlier this month the board judged that it was sensible to allow it time to do its work. the board believed that the inflation outlook, at least as we assess it at present, would provide scope to ease further, should that be necessary to support demand. but for now, the board decided it was prudent to sit still. turning briefly to other areas of the bank ’ s responsibilities, in june last year the payments system board released the conclusions from its strategic review of innovation in the payments system. the review identified areas in which innovation in the australian payments system could be improved through more effective cooperation between stakeholders and regulators. one of the gaps identified in the review was the inability of businesses and consumers to make payments through the banking system that are received immediately, including when

, the gross stocks can change quite significantly even with low net flows. debt https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 08 - 27. html 4 / 12 8 / 28 / 2019 a balance of payments | speeches | rba on the liability side, there has been a large shift from short - term debt to long - term debt. in net terms, long - term debt liabilities are currently 52 per cent of gdp. they are slightly larger than australia's total net foreign liabilities. they have risen from around 25 per cent of gdp in the early 2000s. over the same period, the share of short - term debt has declined from 20 per cent to be just under 5 per cent of gdp now. as graph 3 shows, the movement in the net position masks, as it often does, different dynamics in the gross positions. the decline in net short - term debt is mostly due to the growth in short - term debt assets that we hold. but short - term debt liabilities have also declined from their peak. graph 3 what has been the driver of the increase in foreigners'holdings of australian long - term debt over the past decade or so? the main explanation has been the large accumulation of australian public sector debt by foreigners, including by central banks and other public sector asset managers. central banks increased their allocation to australia in their foreign reserves portfolios in the aftermath of the global financial crisis. foreign ownership of australian government bonds increased from around 40 per cent in the early 2000s, peaking at nearly 80 per cent in 2012 ( graph 4 ). [ 3 ] at the same time, the size of the australian government bond market grew significantly. https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 08 - 27. html 5 / 12 8 / 28 / 2019 a balance of payments | speeches | rba graph 4 as a result, foreign holdings of public sector [ 4 ] debt increased from 7. 5 per cent of gdp in 2009 to around 20 per cent by 2015 and has been relatively stable since then. correspondingly the public sector's share of gross debt liabilities increased from around 10 per cent in the late 2000s to around 20 per cent in 2012, where it has remained since ( graph 5 ). at the same time, the share of private financial debt ( mainly banks ) has fallen since the crisis. https : / /