RBA holds rates steady again
Cash rate remains at 1.50%
What’s the RBA thinking?
The Reserve Bank of Australia (RBA) has maintained its “wait and see” approach and decided to hold the official cash rate steady at today's monthly board meeting.
There have been no major domestic economic changes, over the past month, to persuade the RBA to shift their current monetary policy position. Inflation remains just above the target range, unemployment tracked lower and tomorrow's GDP result is expected to be soft due partly to weather events in April.
Today’s decision keeps the cash rate at the record low of 1.50%.
Source: RBA, ABS, CoreLogic
- Capital city home values fell -1.1% in May and rose 8.3% over the past year.
- Adelaide (0.8%) and Brisbane (0.3%) were the only two capitals to see dwelling prices rise in May.
- Nationally, new listings are -1% lower and total listings are down -4.1%, compared to this time last year.
- Positively, new listings in Sydney are now 15% higher than this time last year with total listings up 6.3%.
- The unemployment rate declined from 5.9% in March to 5.7% in April.
- The Australian dollar fluctuated between US$0.73 and US$0.73 over the past month.
A slowdown in house price growth, softness in the employment markets and a weak GDP result, tomorrow, may see the RBA begin to re-evaluate the need for a rate cut to help stimulate economic activity.
Property markets around the country have begun to show signs that the recent interest rate rises by the banks and tighter investor lending restrictions are starting to have an effect. Listings have begun to rise, in most capital cities, and the first indications that property price growth has begun to moderate have emerged.
Positively, at 1.50% the RBA does have room to cut rates if needed.