RBA keeps rates at 2% in Melbourne Cup day decision

RBA keeps rates at 2% in Melbourne Cup day decision
RBA keeps rates at 2% in Melbourne Cup day decision

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 Date Change in cash rate
Percentage points
New cash rate target
Per cent
4 Nov 2015 0.00 2.00
7 Oct 2015 0.00 2.00
2 Sep 2015 0.00 2.00
5 Aug 2015 0.00 2.00
8 Jul 2015 0.00 2.00
3 Jun 2015 0.00 2.00
6 May 2015 -0.25 2.00
8 Apr 2015 0.00 2.25
4 Mar 2015 0.00 2.25
4 Feb 2015 -0.25 2.25
3 Dec 2014 0.00 2.50
5 Nov 2014 0.00 2.50
8 Oct 2014 0.00 2.50
3 Sep 2014 0.00 2.50
6 Aug 2014 0.00 2.50
2 Jul 2014 0.00 2.50
4 Jun 2014 0.00 2.50
7 May 2014 0.00 2.50
2 Apr 2014 0.00 2.50
5 Mar 2014 0.00 2.50
5 Feb 2014 0.00 2.50
4 Dec 2013 0.00 2.50
6 Nov 2013 0.00 2.50
2 Oct 2013 0.00 2.50
4 Sep 2013 0.00 2.50
7 Aug 2013 -0.25 2.50
3 Jul 2013 0.00 2.75
5 Jun 2013 0.00 2.75
8 May 2013 -0.25 2.75
3 Apr 2013 0.00 3.00
6 Mar 2013 0.00 3.00
6 Feb 2013 0.00 3.00
5 Dec 2012 -0.25 3.00
7 Nov 2012 0.00 3.25
3 Oct 2012 -0.25 3.25
5 Sep 2012 0.00 3.50
8 Aug 2012 0.00 3.50
4 Jul 2012 0.00 3.50
6 Jun 2012 -0.25 3.50
2 May 2012 -0.50 3.75
4 Apr 2012 0.00 4.25
7 Mar 2012 0.00 4.25
8 Feb 2012 0.00 4.25
7 Dec 2011 -0.25 4.25
2 Nov 2011 -0.25 4.50
5 Oct 2011 0.00 4.75
7 Sep 2011 0.00 4.75
3 Aug 2011 0.00 4.75
6 Jul 2011 0.00 4.75
8 Jun 2011 0.00 4.75
4 May 2011 0.00 4.75
6 Apr 2011 0.00 4.75
2 Mar 2011 0.00 4.75
2 Feb 2011 0.00 4.75
8 Dec 2010 0.00 4.75
3 Nov 2010 +0.25 4.75
6 Oct 2010 0.00 4.50
8 Sep 2010 0.00 4.50
4 Aug 2010 0.00 4.50
7 Jul 2010 0.00 4.50
2 Jun 2010 0.00 4.50
5 May 2010 +0.25 4.50
7 Apr 2010 +0.25 4.25
3 Mar 2010 +0.25 4.00
3 Feb 2010 0.00 3.75
2 Dec 2009 +0.25 3.75
4 Nov 2009 +0.25 3.50
7 Oct 2009 +0.25 3.25
2 Sep 2009 0.00 3.00
5 Aug 2009 0.00 3.00
8 Jul 2009 0.00 3.00
3 Jun 2009 0.00 3.00
6 May 2009 0.00 3.00
8 Apr 2009 -0.25 3.00
4 Mar 2009 0.00 3.25
4 Feb 2009 -1.00 3.25
3 Dec 2008 -1.00 4.25
5 Nov 2008 -0.75 5.25
8 Oct 2008 -1.00 6.00
3 Sep 2008 -0.25 7.00
6 Aug 2008 0.00 7.25
2 Jul 2008 0.00 7.25
4 Jun 2008 0.00 7.25
7 May 2008 0.00 7.25
2 Apr 2008 0.00 7.25
5 Mar 2008 +0.25 7.25
6 Feb 2008 +0.25 7.00

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Interest Rates

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