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Cash rate on hold for another month

On Aug 08 2012
Tagged as:
  • Residential Property


The Reserve Bank of Australia (RBA) has left the official cash rate on hold at 3.5 per cent - as ...

The Reserve Bank of Australia (RBA) has left the official cash rate on hold at 3.5 per cent - as anticipated by economists.

Meeting yesterday (August 7), the RBA made the decision to keep the cash rate stabilised for the second month in a row, following previous cuts in May and June.

The central bank's latest move followed with economist predicting interest rates would be kept steady due to global uncertainty stemming from Europe's debt crisis.

RBA governor Glenn Stevens said in a statement: "As a result of the sequence of earlier decisions, monetary policy is easier than it was for most of 2011.

"Financial markets have responded positively to signs of progress, but Europe will remain a potential source of adverse shocks for some time."

According to a Fairfax report, HSBC economist and former central bank official Paul Bloxham said slowing global economic growth would potentially lead to another interest rate cut this year - indicating more mortgage relief for residential property owners.

"If the Aussie dollar stays high and puts further downward pressure on inflation, it leaves them with even more room to cut the cash rate," Mr Bloxham said.