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Interest rate announcement

The Reserve Bank has decided to leave interest rates on hold this month. This follows last month’s surprise decision to cut rates to a record low 2.75 percent.

Economic indicators have generally improved over the past month, particularly in regard to unemployment rates. The lower dollar also provides a positive to the Bank although the stockmarket remains volatile despite a better outlook for the international economy.

The state of local economies however remains mixed with a solid New South Wales and an improving Queensland offset by ongoing concerns over Victoria and some recent deterioration in the Western Australian economy.

“A continuing patchy economic performance together with the federal budget forecast of rising unemployment and falling growth translates into a cloudy outlook for the national economy.

As a consequence the current bias on short-term interest rate movements remains slightly downwards despite today’s decision to leave rates unchanged”, says Dr Andrew Wilson Senior Economist for Australian Property Monitors.
“Home buyers thrive on low interest rates but the key to sustained growth in housing markets is a healthy economy and low unemployment”.

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