Ensure you never miss an issue of the
real estate business bulletin
RBA makes much-anticipated cash rate call

RBA makes much-anticipated cash rate call

by Reporter 0 comments

The Reserve Bank of Australia has delivered its decision from its monthly board meeting.

Board members decided to slash the official cash rate from 2 per cent to a new record low of 1.75 per cent.

According to a finder.com.au survey of 28 economists and commentators, all but one had expected rates to remain on hold.

CommSec’s Savanth Sebastian correctly predicted today’s decision based on the recent low inflation of 1.3 per cent.

“When it comes to inflation, central banks across that globe are facing the same concerns,” Mr Sebastian said.

“The bottom line is that underlying inflation is undershooting the 2 to 3 per cent target band, and that suggests little risk in cutting rates a little further.”

The other 27 experts surveyed cited a robust labour market, a recovering Australian dollar and an imminent federal budget among the reasons behind why the cash rate would stay put.

Shane Garrett, senior economist for the Housing Industry Association, said the current balance between inflation, growth and exchange rate conditions did “not warrant an immediate interest rate reduction”.

Bank of Sydney’s Steven Pambris said any move on rates by the RBA would “lack prudence”, given that the budget was set to be unveiled on Tuesday night.

As for the prospects of a rate movement beyond May, 55 per cent of the 22 experts who answered this question believe a cut is on the cards in 2016, while 45 per cent expect no movement until next year. Only three experts predicted a rate rise this year.

RBA makes much-anticipated cash rate call
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?