Interest Rates - latest update

The Reserve Bank of Australia has announced that the official interest rate will remain on hold at 1.5%.

The rate is a record low, held steady for the past 21 months. The previous record was a rate hold over 17 months in 1995-1996.

Current economic conditions are considered reasonable steady, with inflation remaining at the lower end of the RBA’s target.

However, housing markets have shown a recent slowing in growth and household debt is at record highs. It is reported that businesses have a confidence in the economy while consumer confidence is weaker.

Other factors being monitored are the global economy & current trade disputes, the current Royal Commission into the banking sector and the widening wage gap in Australia.

Despite the record low official interest rate in Australia, global money market movements have resulted in some lenders experiencing a higher cost of funds, leading to what is termed “out-of-cycle rate increases” due to funding pressures and also regulatory requirements.

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