The Reserve Bank of Australia met today to decide on the cash rate for the month ahead.
Following their meeting the Governor of the Reserve Bank, Phillip Lowe, announced that the cash rate will remain on hold at 1.5% for March 2017.
Phillip Lowe’s monetary policy decision statement almost exactly mirrors February’s update and can be summarised as below. The full statement can be read on the RBA’s website here.
- Conditions in the global economy have continued to improve over recent months and business and consumer confidence have started to pick up;
- Interest rates are expected to further increased in the United States and there is no longer an expectation of additional monetary easing in other major economies;
- The Australian economy is still transitioning following the mining investment boom, expanding by around 2.5% in 2016;
- Exports have risen strongly and non-mining business investment has also risen over the past year;
- Most measures of business and consumer confidence are at, or above, average;
- Consumption growth was stronger towards the end of 2016, although growth in household income remains slow;
- Financial institutions remain in a good position to lend;
- The unemployment rate has been steady at around 5.75% over the past year, with employment growth concentrated in part-time jobs;
- Inflation remains quite low and with growth in labour costs remaining subdued, underlying inflation is likely to stay low for some time;
- Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets prices are declining;
- Growth in rents is at the slowest it has been in two decades; and,
- Borrowing for housing by investors has picked up over recent months and supervisory measures have contributed to some strengthening of lending standards.
This month’s decision is the sixth consecutive month where the Reserve Bank has left the cash rate on hold. The last change in the cash rate was in August 2016 where it was cut to the current 1.5%.
SO, WHAT DOES IT ALL MEAN?
With mortgage interest rates at an all-time low also, credit lenders around Australia are in high competition with each other to offer attractive rates and products and secure business.
Now is the perfect time to review your existing financial solution to see if you could be saving money on your repayments and to ensure that you are still using the most suitable solution available.
If you have any questions about your mortgage or about the cash rate and how it impacts you, please do not hesitate to contact iconic home loans on 1300 663 943 or by enquiring via our website.
Thanks for taking the time to read this update guys, have a great week ahead!