RBA leaves cash rate at 3.5 per cent
Homeowners looking forward to a third consecutive cut from the Reserve Bank of Australia were left disappointed with the bank's decision yesterday (July 3) to keep rates on hold at 3.5 per cent.
The RBA, which has cut the cash rate by 75 basis points since May, attributed its latest move to the continuing uncertain economic conditions in Europe and a deceleration in Chinese markets.
RBA governor Glenn Stevens said the ongoing trend was that the Australian economy had continued to grow in the first part of the year, but the outlook for international markets remained unclear.
Mr Stevens explained the decision: "At today's meeting, the board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate."
Financial comparison website RateCity said the RBA's move to hold the cash rate was expected and indicated the potential for further cuts this year.
"With the cash rate sitting at 3.5 per cent, the RBA still has room to drop further this year if local or global economic conditions deteriorate," RateCity spokesperson Michelle Hutchinson said.
Ms Hutchinson advised borrowers looking at buying a house to consider fixed rate or variable home loans below six per cent.