Invest
RBA reveals September cash rate
The Reserve Bank of Australia (RBA) has announced the official cash rate for September amid higher unemployment, stage four lockdowns in Victoria and a soon to be reduced JobKeeper payment.
RBA reveals September cash rate
The Reserve Bank of Australia (RBA) has announced the official cash rate for September amid higher unemployment, stage four lockdowns in Victoria and a soon to be reduced JobKeeper payment.
Despite some economic woes the central bank has acted as most economists previously predicted, holding the official cash rate at 0.25 per cent for the sixth straight month.
Speaking before the announcement AMP’s chief economist Dr Shane Oliver predicted the RBA will hold rates until government benefits completely expire in March 2021.
"For now the RBA will remain on hold. It views the March monetary easing package as continuing to help the economy and the main action now being in fiscal policy,” Dr Oliver said.
The chief economist pointed out the potential of future cash rate changes after the JobKeeper completely ends in March.
“There is a significant chance it may cut the cash rate to 0.1 per cent and it may do more aggressive quantitative easing but that would not be for several months.”
“And it remains “extraordinarily unlikely” to cut the cash rate below zero,” he said.
Staying lower for longer
Dr Oliver explained savers better get used to a reduced rate as the economic recovery from the COVID-19 pandemic will be years away.
“The next interest rate move of significance is likely to be a hike but with high unemployment and underemployment, lots of spare capacity in the economy and underlying inflation way below target this is at least three years away," Dr Oliver concluded.
Baillieu chief investment officer Malcolm Wood agrees with Dr Oliver stating the central bank won’t move on rates until the economy is back on track.
"RBA to leave rates at effectively zero until the economy approaches full employment and inflation sustainably in the 2-3 per cent range. This appears years away."
About the author
About the author
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 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. ...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
Cash
Big 4 banks forecast October rate cut
Two of Australia’s largest financial institutions believe the Reserve Bank of Australia will reduce rates on 6 October to help support the federal budget due out the same day. ...Read more
Cash
RBA open to new record-low rate
The Reserve Bank has flagged the possibility of a rate adjustment, albeit a small possibility, as the country recovers from the COVID-19 pandemic. ...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 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. ...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
Cash
Big 4 banks forecast October rate cut
Two of Australia’s largest financial institutions believe the Reserve Bank of Australia will reduce rates on 6 October to help support the federal budget due out the same day. ...Read more
Cash
RBA open to new record-low rate
The Reserve Bank has flagged the possibility of a rate adjustment, albeit a small possibility, as the country recovers from the COVID-19 pandemic. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
