The Reserve Bank of Australia has, once again, maintained the cash interest rate at its lowest of two percent. This is the sixth month that the rate has been put on hold. During its monthly meeting earlier today, policy makers noted that inflation outlook may be lower than what’s expected despite an improved economy.
RBA Governor Glenn Stevens noted that the global economy is expanding at a moderate pace. He also cited the softening in conditions in Asia, Europe’s recovery and the continued growth in the U.S.
“The Federal Reserve is expected to start increasing its policy rate over the period ahead, but some other major central banks are continuing to ease monetary policy. Volatility in financial markets has abated somewhat for the moment,” Stevens added.
The RBA Governor also stressed that monetary policy needs to be accommodative adding that low interest rates are even acting to support borrowing and spending. He acknowledged the recent increase in lending rates made by some banks that can reduce support slightly but he said overall conditions remain accommodative.
In the real estate sector, the housing market in most capital cities continue. Proof of this is the lower auction clearance rates achieved in recent weeks in both Sydney and Melbourne. House price growth in both cities also fell in September and this trend will likely continue till yearend.
From 1990 to 2015, the interest rate in Australia averaged 5.01 percent. It reached its peak of 17.50 percent in January 1990 while its record low of two percent was decided in May this year.
In Australia, the official interest rate is known as the cash rate. It is the rate charged on overnight loans between financial intermediaries and is decided by the Reserve Bank of Australia’s Board.
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By Wendy Chamberlain
Copyright 2015 | All Rights Reserved
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With a passion for all things real estate spanning 18 years, Wendy loves that her role as a
