Are we in for a period of stability in interest rates?

In December 2013 we asked whether the interest rate cutting cycle had come to an end.

 

A little while later, in February, the Reserve Bank (RBA) decided to leave cash rates on hold at 2.5% and for the first time in over two years stopped talking about needing to cut rates any further.

 

Now the RBA has announced in March that rates will stay on hold at 2.5%.  They are carefully watching key economic indicators including:

 

  • Inflation that jumped to “higher than expected” levels in the December quarter
  • Whether housing and construction will continue to increase with record low interest rates
  • Whether the Australian dollar will continue to decrease as the RBA would like it to
  • Business sentiment going up whereas business investment is weakening
  • A jobless rate that is set to rise further

 

The RBA believes that the current level of interest rates is appropriate for the economic conditions and that “the most prudent course is likely to be a period of stability in interest rates.” [Refer to website below for the RBA Media Release]

http://www.rba.gov.au/media-releases/2014/mr-14-03.html

 

So the RBA thinks that it is best to leave things as they are.  This is good news for anyone who can take advantage of record low interest rates that are available right now.

 

If you want to find out whether you can get a better fixed or variable rate, contact Craig at craig.kendall@mortgagechoice.com.au or call on 0411 782 440.

 

 

Image courtesy of jscreationzs / FreeDigitalPhotos.net


Posted in: Interest rates

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