|  en zh

Interest Rates Still On Hold

Your link to the diverse range of information that exists in the world of Property Investing

Interest rates on hold at 2%

The Reserve Bank has left the official interest rate on hold at its historic low of 2% for the seventh consecutive month.

The decision was widely expected after Reserve Bank Governor Glenn Stevens last week said market watchers should "chill out" and come back after Christmas and see what the key economic data says then.

Mr Stevens said the available information suggests that moderate expansion in the economy continued in the face of a large decline in capital spending in the mining sector.

"While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions in non-mining sectors over the past year," Mr Stevens said in a statement released with the decision.

"This has been accompanied by stronger growth in employment and a steady rate of unemployment."

The RBA also noted the global economy was now expanding at a moderate pace, despite some softening in Asia.

Mr Stevens noted that "the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate".

The RBA Left Its Bias Towards Further Rate Cuts Intact

"Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand," Mr Stevens said.

The dollar rose marginally on the news and at 3:00 pm (AEDT), one Australian dollar was buying 72.7 US cents.

RBA Checked Out For Summer

The RBC's Su-Lin Ong said it appeared the RBA had "checked out" for the summer.

"While an easing bias remains intact and confirmed by continued sub-par growth and within target inflation, the balanced tone of today's statement suggests that the RBA remains reasonably comfortable with current settings as 2015 draws to a close," Ms Ong said.

Morgan Stanley's Daniel Blake said the RBA's statement balanced its optimism with a boilerplate "scope for further easing" bias.

However, Mr Blake noted domestic growth concerns would need to again surface before rates were cut to his 1.5% "through" interest rate forecast for next year.

Mr Blake said the RBA was likely to be comforted by the likely start of a gradual lifting of interest rates in the US, which may help push the Australian dollar lower.

Rates will now be on hold at least through to early February, when the RBA board meets again.

Didn't Find What You Were Looking For?
Subdivisions In Queensland

Two lot Subdivisions in Queensland have 3 stages, Council Applications, Construction and Plan Sealing

Learn More
Consult Your Broker

What are the Pitfalls when chasing lower interest rates, and how speaking with financial consultant before changing providers can help you avoid the significant...

Learn More
First Home Buyers Grants

The Queensland first home buyers grant is available for first home buyers who are buying or building a brand new home as their first home.

Learn More