The RBA has decided this afternoon to hold the cash rate.
The central bank’s decision means the official cash rate will stay at 2.5% - the lowest it’s been since 1959.
RBA Governor Glenn Stevens again said that the falling Australian dollar is taking away the need for the central bank to cut further.
“The Australian dollar has depreciated by around 15 per cent since early April, although it remains at a high level,” Mr Stevens said.
“It is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy”.
All of the 11 experts finder.com.au interviewed saw the cash rate being held this month as the RBA remains in “wait and see mode”.
Many also agreed that the RBA would be unlikely to cut rates so close to election day, with Jonathan Chancellor of Property Observer saying “All hell would break loose on the political front were there to be a cut,”.
Will we get another cut?
The economists finder.com.au spoke to, as well as other economists and business commentators speaking to the media recently, said there may be another rate cut later in the year.
Janu Chan from St George said this would most likely be on Melbourne Cup day.
“[The RBA] has cut rates in August and that rate cut and all rate cuts earlier are still taking time to have an impact on the economy,” she said.
“I think it's choosing to wait a bit for that, but we're expecting they will cut again in November when they get a little more data.”
Robert Henderson - NAB
"We expect the RBA to make no change to monetary policy at its September meeting. This was made clear in the Minutes from the August meeting where the RBA said that the Board decided “…the Bank should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further”. The bias is to ease more but a decision to cut was not "imminent". Hence, since the run of data has not been markedly worse during August, they will be on hold in September. The first ‘live’ meeting for another cut will be November. If the late October CPI is low and activity worse they will discuss a cut in November. Our call is they will lower the cash rate by 25bps to 2.25% in November.
What does the decision mean for homeowners or those looking to purchase a property?
According to finder.com.au’s spokesperson Michelle Hutchison, even if interest rates don’t decrease, now is a good time to consider refinancing to take advantage of spring mortgage specials.
“Lenders have hit the ground running for mortgage season, with offers targeted at first home buyers as well as existing borrowers,” she said.
“For instance, if you found a better deal than your current lender, ask them to match it or consider switching. If you’re a first home buyer, use comparison sites like finder.com.au, work out your serviceability with mortgage calculators and compare what home loans will suit you.”
Below are some of the deals on offer at the moment.
|Lenders||Special Offers||Due Date|
|NAB||$1000 offer for those refinancing with a loan of $200,000 or more.||Sep 30 2013|
|RAMS||$1000 refinance offer and no application or settlement fees for first home buyers||Sep 30, 2013|
|ANZ||A 0.90% discount for a limited time|
|HSBC||Waived establishment fee of up to $600 for the Home Value Loan||Sep 20, 2013|