The Reserve Bank of Australia has announced its official cash rate decision for June following its monthly board meeting.
In a move widely predicted by industry experts, the RBA board has decided to keep the cash rate at 1.5 per cent.
The finder.com.au Reserve Bank Survey™ asks some of Australia’s most authoritative financial experts what move the RBA will make each month. Every one of the 25 plus experts on the panel predicted that the record low official cash rate would remain unchanged today.
Jordan Eliseo from ABC Bullion said that the RBA would keep rates steady, “Though we remain convinced the next move will be an interest rate cut,” he said. “Local economic data remains soft at best, whilst fears over house price declines, and a more subdued environment for private sector credit growth continue to build, fuelled by some of the more troubling revelations from the Royal Commission.”
The RBA governor Philip Lowe stated today: “The global economy has strengthened over the past year. A number of advanced economies are growing at an above-trend rate and unemployment rates are low.”
“The housing markets in Sydney and Melbourne have slowed. Nationwide measures of housing prices are little changed over the past six months, with prices having recorded falls in some areas,” he said. “Housing credit growth has slowed over the past year, especially to investors.”
“APRA’s supervisory measures and tighter credit standards have been helpful in containing the build-up of risk in household balance sheets, although the level of household debt remains high. While there may be some further tightening of lending standards, the average mortgage interest rate on outstanding loans is continuing to decline.”
“The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual,” said Mr. Lowe. “Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
We understand that the Reserve Bank does not expect any negative wealth effects from falls in house prices.
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