Interest Rates

RBA Rate Announcement

By December 1, 2015 No Comments

The Reserve Bank of Australia has made its final interest rate decision of the year at its monthly board meeting. 

The board confirmed most punters expectations by leaving the official cash rate at a record-low setting of 2 per cent, where it has been since May.

All 33 economists and commentators recently surveyed by comparison website finder.com.au called today’s result.

At various times this year, there has been talk that the RBA might either cut rates to stimulate the economy or increase rates to cool the Sydney and Melbourne property markets.  The banks recently did that job for them, increasing rates out of cycle.

However, with the economy growing slightly stronger and the nation’s two biggest housing markets slowing down, those two concerns appear to have cancelled each other out.

Commsec economist Savanth Sebastion has said that the RBA is comfortable with how the economy is evolving and so is in ‘wait and see” mode.

Domain Group senior economist Andrew Wilson said the RBA wanted to hold off until the next US rate decision, which will occur 16 December.

After today’s decision, speculation will begin about what the RBA will do at its next board meeting in February.

Most Economists expect rates to remain on hold.

Based on 3 per cent real GDP growth, it certainly looks like the economy is ending this year on a more positive note.

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