Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
subscribe to our newsletter

RBA reveals cash rate decision

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

The board resolved to leave the official cash rate at 2 per cent, in line with the overwhelming majority of market predictions.

The official cash rate has been at 2 per cent since May 2015.

Advertisement
Advertisement

Thirty of the 31 economists and commentators surveyed by comparison website finder.com.au accurately predicted today’s result.

Many commentators anticipated the Reserve Bank would maintain its observational stance, waiting for a significant change in local or international economic conditions before opting to move rates and maintaining future leverage in the process.

AMP Capital’s chief economist Shane Oliver echoed this sentiment in his forecast, telling finder.com.au, “Recent Reserve Bank commentary suggests a degree of comfort with the current level for the cash rate and while it retains an easing bias, not enough has changed to suggest it is about to act on it. It's basically in wait and see mode regarding the jobs market and the potential impact of global financial turmoil.”

According to Onthehouse.com.au’s Peter Boehm, current economic conditions in Australia are too strong to dictate a rate cut, with any downward movement unlikely to be passed on by the banks regardless.

“Holding rates seems like the sensible option at this stage. With inflation under control (and unlikely to be a problem for the next twelve months or so), unemployment at sub 6 per cent with good participation rates and reasonable, albeit below trend, economic growth as measured by GDP, there is no need to help stimulate the economy by dropping rates further right now.

“In any event, there is some doubt that a drop in the Reserve Bank’s cash rate would be passed on to consumers in full through lower borrowing costs as lenders aim to shore up their balance sheets and bottom line,” Mr Boehm said.

Twenty-three per cent of finder.com.au’s commentators believe a rate rise is due in 2016, while six of the 31 commentators predicted a rate cut at some point during the year.

 

RBA reveals cash rate decision
mortgagebusiness

Latest News

Liberal senator for WA, Dean Smith, is calling on lenders to convert principal and interest home loans for investors into interest-only repa...

Expectations of an increase in margin pressures and a “significant deterioration” in asset quality have prompted Moody’s to downgrade ...

The central bank of New Zealand has frozen the distribution of dividends on ordinary shares across all banks in the New Zealand market, aff...

FROM THE WEB
podcast

LATEST PODCAST: Managing the influx of COVID-19-related loans

Do you expect COVID-19 to reduce or increase your business flows?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

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