RBA Leaves Rates On Hold.
As expected the RBA at it’s monthly Board Meeting today left the cash rate on hold at 1.50%. This makes 18 consecutive months that the RBA has not adjusted the cash rate in either direction, bearing in mind there is traditionally no Board Meeting in January.
Retail sales over the Christmas period came in lower than forecast, which is indicative of consumers tightening their belts in the face of rising cost of living and flat wages growth.
The Aussie dollar has recently strengthened against the US dollar which is also cause for concern as it makes our exports less attractive on world markets. A rise in the cash rate would only further fuel a strengthening in our currency, therefore exacerbating the problem.
Most recently we have seen what will likely amount to a significant correction in the share markets, further dampening economic gains and overall confidence. We remain of the opinion that the RBA Cash Rate will remain at historic lows over the near term and possibly into 2019, particularly if the current downward trends in the share markets continues.
Home loan interest rates for borrowers remain at historic lows. There remains intense competition amongst Lenders for new business, whether it’s a new loan or a refinance loan.
We strongly recommend those looking for a new loan seek advice and ensure they are comparing a range of products from a range of Lenders. Likewise, those with an existing loan should take the opportunity to review their loans to see if they can get a better deal.
Mark Lewis, Managing Director