RBA keeps cash rate on hold at May 2019 meeting despite growing pressure

The RBA kept the cash rate on hold at 1.5 percent in its May meeting.

It has now stayed at record lows for 30 consecutive meetings. 

The last time the rate changed was in August 2016, under the eye of former RBA governor Glenn Stevens.

CoreLogic's head of research Tim Lawless says despite the hold, a cash rate cut soon seems likely.

"The flat CPI reading for the March quarter wasn’t enough to drag interest rates lower, although the likelihood of a cash rate cut over coming months remains high," Lawless said.

"While inflation remains below the RBA’s target range, labour markets generally remain relatively strong, supported by NSW and Vic, and the decline in housing values has lost some speed over recent months.

"If the cash rate does move lower later this year, a reduction in mortgage rates would provide some support for housing demand, however we may not see quite as much stimulus for housing market conditions that we have seen after previous rate cuts. 

"Generally, housing sentiment remains low and borrower mortgage serviceability is still assessed based on mortgage rates of at least 7%. 

"Households who already have a mortgage, or prospective borrowers who are able to satisfy lender credit policies will be the winners if interest rates do fall later this year."