Invest
RBA hands down rate decision on cup day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates.
RBA hands down rate decision on cup day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates.
Following an out of cycle rate reduction in March, the RBA has followed market consensus and reduced the official cash rate to 0.10 per cent.
AMP chief economist Shane Oliver correctly predicted the RBA would cut rates prior to the announcement.
"The RBA’s own forecasts show that it will not achieve its employment and inflation objectives over the next two years and so further easing is required to help address this. Recent RBA commentary has provided a strong signal that further easing is imminent. We expect this to take the form of a rate cut to 0.1 per cent and broad-based quantitative easing."” said Mr Oliver.
Bankwest Curtin Economics Centre director Rebecca Cassells said the RBA’s cut signals its intent to further support the economic recovery by making borrowing as attractive as possible for households.
“Low inflation figures will tip the RBA’s decision to cut rates and we may also see additional quantitative easing over the coming months if progress towards the RBA’s 2-3 percent inflation target is viewed as too slow”, she said.
“Now that Victoria can add its strength, the pace of economic and job recovery should pick up substantially in the coming weeks and months. Whether this pace will deliver a full recovery of jobs lost plus additional employment and wage growth remains more possible than probable at this time.".
Tom Devitt, Housing Industry Association noted Australia’s inflation rate was well below the RBA’s target as well as the high rate of unemployment.
“The risks for the economy are highly asymmetric, with the costs of doing too little likely to be far greater than the costs of doing too much,” he said.
“The RBA’s balance sheet expansion is also significantly behind that of other central banks. This is putting upward pressure on the Australian dollar, weighing on exports and potentially turning consumers towards imports rather than domestic goods and services."
IFM Investors chief economist Alex Joiner said while the RBA has been signaling that it is considering easing policy further, the economy needed fiscal support or modern monetary policy.
“The RBA has strongly signaled it thinks it needs to do more to support the economic recovery. Cutting the cash rate alone won't be enough though as a 15bp reduction won't do much, it will be part of another package from the RBA that will likely include a broader effort on quantitative easing as a minimum," he concluded.
About the author
About the author
Cash
RBA makes latest official cash rate call
The Reserve Bank of Australia has made its May call on the official cash rate, with the economy said to be a long way from the conditions needed to precede a rate rise. ...Read more
Cash
RBA puts chatter of an earlier rate hike to rest
The Reserve Bank of Australia has put to rest chatter among investors that conditions for a higher cash rate could be met as early as next year, reaffirming its stance that the rate is “very likely...Read more
Cash
Australia tipped to go cashless by 2024
Australia is forecast to effectively go cashless in just three years, with three in 10 Aussies admitting that “going cashless would be great for the country”. ...Read more
Cash
Tips to finding a middle ground between equities and term deposits
With record-low interest rates and a volatile sharemarket, mature Australians looking to protect their assets while maintaining their income are being driven to fixed-income products, an industry expe...Read more
Cash
What’s next for paper money?
How many times in the past week have you actually had to pull out your wallet to pay for something? And out of those times, did you actually go to use cash? ...Read more
Cash
Last rate day of the year revealed
The Reserve Bank of Australia has announced its decision on the official interest rate for December, following predictions of a hold. ...Read more
Cash
RBA hands down rate decision for Budget day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates. ...Read more
Cash
New $100 banknote rollout a ‘big logistical exercise’
The Reserve Bank has announced a release date for its much-anticipated new $100 banknote. ...Read more
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Dissecting the budget and what it means for your equities, property and super
Listen now
Has the property market reached its peak; Biden’s climate summit and our sharemarket, and the upcoming budget
Listen now
Cash
RBA makes latest official cash rate call
The Reserve Bank of Australia has made its May call on the official cash rate, with the economy said to be a long way from the conditions needed to precede a rate rise. ...Read more
Cash
RBA puts chatter of an earlier rate hike to rest
The Reserve Bank of Australia has put to rest chatter among investors that conditions for a higher cash rate could be met as early as next year, reaffirming its stance that the rate is “very likely...Read more
Cash
Australia tipped to go cashless by 2024
Australia is forecast to effectively go cashless in just three years, with three in 10 Aussies admitting that “going cashless would be great for the country”. ...Read more
Cash
Tips to finding a middle ground between equities and term deposits
With record-low interest rates and a volatile sharemarket, mature Australians looking to protect their assets while maintaining their income are being driven to fixed-income products, an industry expe...Read more
Cash
What’s next for paper money?
How many times in the past week have you actually had to pull out your wallet to pay for something? And out of those times, did you actually go to use cash? ...Read more
Cash
Last rate day of the year revealed
The Reserve Bank of Australia has announced its decision on the official interest rate for December, following predictions of a hold. ...Read more
Cash
RBA hands down rate decision for Budget day
The Reserve Bank of Australia has announced its decision on the official interest rate this month, following predictions of a potential cut to rates. ...Read more
Cash
New $100 banknote rollout a ‘big logistical exercise’
The Reserve Bank has announced a release date for its much-anticipated new $100 banknote. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
