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Steady as she goes, the RBA holds the cash rate again

The Reserve Bank of Australia has decided to leave the official cash rate on hold once again.


Today’s decision marks the nineteenth consecutive month that the Board has left the cash rate untouched at 1.50%.

The decision was unsurprising when you consider the latest economic data.

The Australian economy continues to perform relatively well. Business conditions were stronger than expected in the September quarter of 2017 as we saw private non-mining investment perform above expectations.

Further, employment rates grew over 2017. The unemployment rate in January 2018 was just 5.5%.

The National Australia Bank’s Business Survey, found that business conditions across all major industry groups were solid over February.

Meanwhile, Westpac’s Consumer Sentiment Index found that consumer sentiment fell throughout the month.

In addition, data from CoreLogic found that national dwelling values slipped 0.1% over February, 0.8% lower than they were at their peak in September 2017.

Furthermore, we have seen considerable volatility with respect to interest rates from Australia’s lenders.

These factors combined support the RBA’s decision to hold the cash rate for yet another month.

That being said, the stability of global and domestic economies provide a strong case for eventual cash rate rises in the future.

Borrowers should speak to their local mortgage broker in order to prepare for any upward rate adjustments. If you have been in the same home loan product for a while now, you should review your options and ensure you’re in the right home loan for your needs now and into the future.

Posted in: Interest rates

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