At its March Board meeting, the Reserve Bank of Australia made the executive decision to leave the cash rate on hold.
Today's decision marks the seventh consecutive month that the cash rate has been left on hold at 1.5%.
Despite ongoing volatility in both the global and domestic markets, today's decision was largely ‘expected'.
In recent weeks, the RBA governor Philip Lowe has made it clear that further cash rate reductions are now more unlikely than likely.
During his opening address to the House of Representatives Standing Committee on Economics, Mr Lowe said the current monetary policy setting was “appropriate for achieving sustainable growth” in the economy.
And it seems Mr Lowe was 100% correct.
In recent weeks, the domestic economy has turned a corner, with improvements in consumer confidence, business conditions, property prices and Gross Domestic product (GDP).
At the end of last month, data from the Australian Bureau of Statistics found GDP rose 1.1%, smashing economist expectations of a 0.8% rise.
In addition, the latest Westpac Melbourne Institute of Consumer Sentiment Index found that confidence had rebounded 2.3% in February.
While pessimists continue to outnumber optimists, consumer sentiment is once again headed in the right direct, which bodes well for the future.
Furthermore, data from CoreLogic found property values climbed 1.4% across the combined capital cities throughout February, with Sydney the standout performer once again.
Given that the economy is now tracking along quite nicely, there was no immediate reason for the Reserve Bank to change their current stance on monetary policy.
Of course, while the cash rate has been stable for seven months, lender interest rates have been anything but stationary.
Over the last few weeks, many of Australia's lenders have tightened the reigns on investment lending. Some have tweaked their policy, while others have lifted the interest rates charged on their suite of investment products by as much as 25 basis points.
Looking ahead, we would expect to see further out of cycle rate hikes by Australia's lenders. As such, borrowers are encouraged to speak to their mortgage broker and make sure they are still in the right product for their needs.
If you haven't reviewed your home loan in 12 months or more, now is the time to act.
Alternatively, if you aren't in the property market but have been thinking about buying in the not-too-distant future, now is the ideal time to investigate your financing options.
Mortgage Choice CEO talks RBA decision
Mortgage Choice CEO John Flavell offers insights into the RBA's decision to hold the cash rate - including what this means for borrowers, why home owners might want to think about fixing, and what this decision means for the broader economy.Watch the video below.