Powered by MOMENTUM MEDIA
subscribe to our newsletter

RBA rate announcement

The Reserve Bank of Australia has announced the result of its monthly board meeting.

The official cash rate has been reduced to a new record-low of 2.25 per cent after being left on hold at 2.5 per cent since August 2013.

The Reserve Bank’s decision has come as a surprise: a finder.com.au survey of 30 economists and commentators found that 28 expected the cash rate to remain unchanged.

However, a rate cut is hardly a shock given the weight of speculation since the last board meeting on 2 December 2014.

Westpac, NAB and ANZ all subsequently forecast that rates would fall some time in the first half of 2015.

Advertisement
Advertisement

The two survey respondents who predicted today’s cut were Bill Evans, chief economist at Westpac, and Nathan McMullen, head of product and digital at RAMS.

Mr McMullen said that with consumer confidence and inflation low, the Reserve Bank would cut rates to help boost the economy and depreciate the Australian dollar.

Several of the other survey respondents also gave an indication of what forced the Reserve Bank to act, even though they didn’t expect it to happen as early as today.

ME Bank’s general manager of markets, John Caelli, said growth and consumer confidence have been weaker than the board would like.

“Market sentiment has fundamentally shifted over the past two months as oil prices have plummeted and concerns about deflation in Europe grow. This has led to markets expecting 0.50 per cent in rate cuts in the first half of 2015,” Mr Caelli said.

PROMOTED CONTENT


LJ Hooker chief executive Grant Harrod said today’s rate cut would boost the property market and lead to an increase in building construction.

“It is most likely to have an impact on markets across the country, particularly for first-time buyers who have felt the pressure of price growth in certain markets over the past 18 months,’’ Mr Harrod said.

“This historic cut will give young people access to cheaper mortgages, something previous generations have not enjoyed, and will hopefully instil them with confidence to come back to the market.”

RBA rate announcement
mortgagebusiness

Latest News

US-based global asset manager Ares Management has made a non-binding conditional proposal to bid for 100 per cent of AMP Ltd shares. ...

The major bank’s FY20 cash profit has plummeted 42 per cent on the prior comparable period, driven by full-year credit impairment charges ...

A former property developer has been found guilty of fraud in relation to obtaining funds from SMSF investors following an ASIC investigatio...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Court cases and penalties

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.