Cash Rate – No change

The Reserve Bank of Australia (RBA) has just announced it will maintain the official cash rate at 1.50%.

Notwithstanding the continuing uncertain developments in Europe we have seen the US economy growing solidly, unemployment falling to 4.6% and the inflation rate picking up.  The market is pricing in a more than 98 per cent probability that, when the US Federal Reserve Board meets in less than a fortnight, it will raise the federal funds rate for the first time in 12 months and only the second time since it dropped the rate to near zero in 2009.

We believe the RBA is unlikely to change the Cash Rate for some months as it will prefer to support the Australian economy and review the outcomes of the proposed increase to US interest rates together with the developments within Europe.    However, we have just seen a few of Australian Lenders increase their standard variable rates to some of their loan products.  This is due to the rise in the cost to raise funds locally and also internationally – the latter due to the uncertainty in global debt markets following the outcome of the recent US election and the continuing developments in Europe.

For more information, or if you would like a free review of your residential, commercial or SMSF loans against other competitive products in the market please contact Peter, David or Simon via this email, our phone: (03) 9882 2500, or visit