Today’s announcement by the RBA Board sees the cash rate remain at 4.10% despite inflation still sitting above the target and the monthly CPI increasing to 5.2% in August, up from 4.9% in July.
In her statement today, incoming Reserve Bank Governor Michele Bullock suggested the full effect of previous rate hikes on our economy are yet to be seen, so while the conditions aren’t perfect the RBA will hold the cash rate firm while they assess the economic outlook.
“Interest rates have been increased by 4 percentage points since May last year. The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month. This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook,” said Ms Bullock.
The announcement provides continued relief for mortgage holders and new property buyers. While it has been a sellers market, today’s announcement and the upcoming seasonal boost to property numbers may help to tip the scales a little more favourably towards buyers.
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