RBA cuts Interest Rate to record low

Market Insights
7 years ago
1 minutes

At its August monetary policy meeting The Reserve Bank cut the official interest rate by 25 basis points to a record low of 1.5 per cent.

The likelihood of inflation returning to indicated targets over time was stated as a key decision-driver behind the cut.

With regards to the housing market, RBA’s Governor Glenn Stevens said house prices “have been rising only modestly over the course of this year.”

He also indicated growth in lending for housing purposes has slowed this year.

The last interest rate cut in May took it to 1.75 per cent, with the total cash rate cut totalling 3.25 per cent since November 2011.

The major banks are only passing on around half the rate cut to customers – and we’ll have to wait. Both CBA and NAB will not pass on the rate cut until Friday, August 19, with 13 per cent from CBA and 10 per cent from NAB.

However, this is still good news for home owners, leaving more money in their pockets come mortgage payment time.

The next RBA meeting will take place in November.

The full RBA August Monetary Policy Decision can be found here