RBA keeps rates at 2% in Melbourne Cup day decision

Jonathan ChancellorNovember 2, 20150 min read

The Reserve Bank of Australia has left the official cash rate unchanged at 2%, in line with most analysts’ predictions. 

Unchanged at historic lows, the official cash rate was last dropped at the May meeting.

"Inflation is low and should remain so, with the economy likely to have a degree of spare capacity for some time yet," the board noted.

"Inflation is forecast to be consistent with the target over the next one to two years, but a little lower than earlier expected.

"In such circumstances, monetary policy needs to be accommodative.

"Low interest rates are acting to support borrowing and spending."

Some 80 percent of leading economists and experts in the finder.com.au RBA Survey predicted this outcome.

The next RBA board meeting is on December 1. 

Tim Lawless, the head of research at CoreLogic RP Data said while interest rates are important to the housing market, other factors are also at play in the recent abatement in the rate of capital growth. 

"Investors are now paying close to a 30 basis point premium on their mortgages, rental yields have slipped to new record lows, housing supply is moving through record peaks and affordability challenges are very much apparent in Sydney and to a lesser extent Melbourne," he said.

Angus Raine, executive chairman, Raine & Horne said the RBA governor didn’t strike him as someone who spooks easily, and "the RBA has taken the sensible move to check more local and international data before tweaking the monetary policy levers again.”

The RBA’s decision to leave the cash rate unchanged does very little to buoy the hopes of those dreaming of buying their first home, according to Laing + Simmons managing director Leanne Pilkington.

 

Interest Rate Decisions2008–2015
Effective DateChange in cash rate
Percentage points
New cash rate target
Per cent
4 Nov 20150.002.00
7 Oct 20150.002.00
2 Sep 20150.002.00
5 Aug 20150.002.00
8 Jul 20150.002.00
3 Jun 20150.002.00
6 May 2015-0.252.00
8 Apr 20150.002.25
4 Mar 20150.002.25
4 Feb 2015-0.252.25
3 Dec 20140.002.50
5 Nov 20140.002.50
8 Oct 20140.002.50
3 Sep 20140.002.50
6 Aug 20140.002.50
2 Jul 20140.002.50
4 Jun 20140.002.50
7 May 20140.002.50
2 Apr 20140.002.50
5 Mar 20140.002.50
5 Feb 20140.002.50
4 Dec 20130.002.50
6 Nov 20130.002.50
2 Oct 20130.002.50
4 Sep 20130.002.50
7 Aug 2013-0.252.50
3 Jul 20130.002.75
5 Jun 20130.002.75
8 May 2013-0.252.75
3 Apr 20130.003.00
6 Mar 20130.003.00
6 Feb 20130.003.00
5 Dec 2012-0.253.00
7 Nov 20120.003.25
3 Oct 2012-0.253.25
5 Sep 20120.003.50
8 Aug 20120.003.50
4 Jul 20120.003.50
6 Jun 2012-0.253.50
2 May 2012-0.503.75
4 Apr 20120.004.25
7 Mar 20120.004.25
8 Feb 20120.004.25
7 Dec 2011-0.254.25
2 Nov 2011-0.254.50
5 Oct 20110.004.75
7 Sep 20110.004.75
3 Aug 20110.004.75
6 Jul 20110.004.75
8 Jun 20110.004.75
4 May 20110.004.75
6 Apr 20110.004.75
2 Mar 20110.004.75
2 Feb 20110.004.75
8 Dec 20100.004.75
3 Nov 2010+0.254.75
6 Oct 20100.004.50
8 Sep 20100.004.50
4 Aug 20100.004.50
7 Jul 20100.004.50
2 Jun 20100.004.50
5 May 2010+0.254.50
7 Apr 2010+0.254.25
3 Mar 2010+0.254.00
3 Feb 20100.003.75
2 Dec 2009+0.253.75
4 Nov 2009+0.253.50
7 Oct 2009+0.253.25
2 Sep 20090.003.00
5 Aug 20090.003.00
8 Jul 20090.003.00
3 Jun 20090.003.00
6 May 20090.003.00
8 Apr 2009-0.253.00
4 Mar 20090.003.25
4 Feb 2009-1.003.25
3 Dec 2008-1.004.25
5 Nov 2008-0.755.25
8 Oct 2008-1.006.00
3 Sep 2008-0.257.00
6 Aug 20080.007.25
2 Jul 20080.007.25
4 Jun 20080.007.25
7 May 20080.007.25
2 Apr 20080.007.25
5 Mar 2008+0.257.25
6 Feb 2008+0.257.00

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
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Interest Rates
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