RBA holds interest rates at 1.5%, as home loan rate hikes in loom

The Royal Bank of Australia announced on Tuesday, interest rates will remain unchanged at 1.50 % for the 23rd consecutive meeting – a widely expected outcome.

Reserve Bank of Australia
Source: Bloomberg

Industry experts predict home loan hikes from the big banks are not far off, following Westpac’s announcement to hike variable interests rates last week.

Economists estimate, the Westpac hike will likely delay any increase in the official cash rate for some time to come, as policy changers have expressed the rate will remain the same till 2020.

RBA Governer, Philip Lowe said while some lenders have increased mortgage rates, the average mortgage rate paid is still lower than a year ago.

Mr Lowe said the 1.5 % cash rate is supporting the Australian economy, but the RBA still has concerns over US international trades.

“One ongoing uncertainty regarding the global outlook stems from the direction of international trade policy in the United States.” Mr Lowe said.

The labour market outlook remained positive, according to the RBA, despite low wage growth.

The RBA says they expect to meet unemployment and inflation targets, through a gradual process.

While the Australian dollar has suffered a tough week, registering lows not seen since early last year, upon the news the AU/USD rose to 0.7236, from 0.7190.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer

Find out more about