Home News Only a few winners emerged after RBA’s latest rate cut decision

Only a few winners emerged after RBA’s latest rate cut decision

Font size :

In a bid to prop up the inflation, the Reserve Bank decided to cut the official cash rate to a new record low of 1.5 per cent. But this move has so far produced only a few clear winners.

With Australia’s biggest banks deciding to only pass a portion of the rate reduction to mortgage and business customers, the benefits of the rate cut may be more muted than originally intended. While the Australian dollar climbed to a three-week high following the rate cut, consumer price gains are still predicted to remain below its targeted range.

According to the RBA’s growth and inflation forecasts, only little has been changed by the recent rate cut. The economy is predicted to expand 2.5 per cent to 3.5 per cent this year. Core inflation is still expected to remain below two per cent until 2018. As for the S&P/ASX 2000 index of stocks, it even fell 1.2 per cent from its close on July 29. The major banks’ decision not to pass on the full rate cut to their borrowers and instead increase selected term deposit products for their savers further complicates the transmission of RBA’s policy through the economy as it seeks to stoke inflation and business investment.

“I believe zero measurable macro impact will come from this latest rate cut,” said Andrew Ticehurst from Nomura Holdings. “We’re getting to the point too where rate cuts are having absolutely marginal beneficial impact. The Reserve Bank has very limited remaining ammunition.”

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

New social housing aims to transform Ivanhoe Estate New social housing aims to transform Ivanhoe Estate

The sprawling redevelopment aims to boost the supply of affordable housing in Sydney Read more

A new suburb will be built in west Melbourne A new suburb will be built in west Melbourne Mount Atkinson will become home to more than 22,000 people over the next 15 years ... Read more

Surging house prices threaten liveability in Melbourne Surging house prices threaten liveability in Melbourne Analysts warn the city could become just as unaffordable as Sydney, if property trends continue ... Read more

More Aussies would benefit from regional hubs linked to cities More Aussies would benefit from regional hubs linked to cities Shorter commutes could spur higher home sales in regional towns, analysts say ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Aug 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords