Reserve keeps rates in reserve for October
Added on by Etairos Accounting
The Reserve Bank of Australia (RBA) has made it two consecutive months of inaction for Australia’s official cash rate.
In what was a widely predicted outcome, today’s RBA board meeting ended with the cash rate remaining at 1.5%, the same decision that resulted from September’s board meeting.
Despite having a number of factors to weigh up, The decision comes as no surprise according Core Logic's head of research, Tim Lawless. He said today’s decision is unlikely to come as a shock. "After two rate cuts earlier in the year, the Reserve Bank’s decision to hold the cash rate at their historically low level of 1.5% came as no surprise. Housing market conditions were almost certainly one of the topics discussed at the board meeting, as well as the stubbornly high Australian dollar, an inflation rate that is well below the target range of 2-3% and a remarkably strong rate of GDP growth released for the June quarter,” he said.
Clearly, the housing market is diverse and low interest rates are only one factor that is influencing conditions. The RBA is likely to be monitoring the housing market closely, looking for any signs of accelerating capital gains in the larger markets, or a ramp up in speculative investment activity,” Lawless said.
(Source: Australian Broker, 4 October 2016)
