The Reserve Bank of Australia has announced the outcome of its monthly board meeting.
As predicted by a vast majority of experts and me (needed to get that in), the board decided to leave the official cash rate at a record low of 2 per cent, where it has been since May 2015.
Thirty–four out of 35 economists and commentators surveyed by comparison website finder accurately predicted today’s result, saying there is still not enough scope for the RBA to change the cash rate, despite the rising Australian dollar, which, by the way is great if your heading to the US for school holidays. I would love to know who the one economist was that called it wrong.
It seems the RBA is satisfied that the current monetary settings are consistent with inflation being within the target band and growth returning to its trend pace over the medium term.
Many experts believe that there will be no cash rate movements for the rest of this year, many predicting a rate rise in 2017, although that increase may come before you think.
It is believed that any easing of interest rates would not be passed onto borrowers , the banks have been telegraphing and out of cycle rate increase to home loan rates for a few weeks, the RBA may continue to keep interest rates on hold, that doesn’t translate to lenders will not increase home loan interest rates.
Stay tuned, we’ll keep you informed.