Money RBA interest rates decision

13:41  06 december  2017
13:41  06 december  2017 Source:   abc.net.au

‘It’s disturbing’: One in seven homeowners with a mortgage have no buffer saved

  ‘It’s disturbing’: One in seven homeowners with a mortgage have no buffer saved One in seven homeowners would be unable to meet mortgage repayments if they were to lose their job, according the latest survey by Canstar.The survey by Canstar revealed that 43 per cent of borrowers have fewer than three months' worth of repayments saved to cope with unexpected changes to their financial situation.

Interest Rate Decisions – 2017. The Reserve Bank sets the target ‘cash rate ’, which is the market interest rate on overnight funds. It uses this as the instrument for monetary policy, and influences the cash rate through its financial market operations.

Get the RBA Interest Rate Decision results in real time as they're announced and see the immediate global market impact. Reserve Bank of Australia ( RBA ) board members come to a consensus on where to set the rate .

Image of the RBA.© AAP Image of the RBA.

The Reserve Bank has left interest rates on hold at a record low 1.5 per cent, with analysts expecting the first rate rise to be almost a year away.

The cash rate has been on hold since it was last cut in August 2016.

The decision to leave rates on hold was anticipated by every economist surveyed by Bloomberg and financial comparison website Finder.

Signs from the Reserve Bank governor's statement again point to rates remaining unchanged for many months to come.

"The low level of interest rates is continuing to support the Australian economy," Philip Lowe wrote.

"Taking account of the available information, the board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."

The RBA is likely to hike rates in the second half of 2018, according to the OECD

  The RBA is likely to hike rates in the second half of 2018, according to the OECD The OECD is urging Australia to begin increasing official interest rates, even if inflation remains weak, to cool the housing market and prevent a blowout in risky debt levels. Forecasting solid economic growth and falling unemployment over the next two years, the OECD said it was time for both monetary and fiscal support to be "gradually withdrawn".The Organisation for Economic Co-operation and Development's latest world economic outlook argues that the Reserve Bank of Australia is likely to begin hiking the official cash rate in the second half of 2018 as a pickup in wages and prices becomes more entrenched.

Interest Rate Decisions – 2016. The Reserve Bank sets the target ‘cash rate ’, which is the market interest rate on overnight funds. It uses this as the instrument for monetary policy, and influences the cash rate through its financial market operations.

RBA Interest Rate Decision . 1.5%. In Australia , interest rates decisions are taken by the Reserve Bank of Australia 's Board. The official interest rate is the cash rate .

That is despite an increasingly upbeat view at the Reserve Bank about growth prospects for both the Australian and global economies.

UBS thinks the RBA is in 'rate cut territory' after the latest declines in Australian property values

  UBS thinks the RBA is in 'rate cut territory' after the latest declines in Australian property values Australia's housing market is cooling, and the recent declines in price growth are consistent with levels at which the RBA has cut rates in the past, UBS says. Monthly data from CoreLogic this morning showed growth in property values remained flat across the country in November.It leaves annual price growth at 5.2%, which has now halved since hitting a recent peak of 10.4% in May 2017.And UBS economists George Tharenou and Carlos Cacho noted that price growth on a six-month basis has been just 0.7%.

Interest Rate Decisions – 2018. The Reserve Bank sets the target ‘cash rate ’, which is the market interest rate on overnight funds. It uses this as the instrument for monetary policy, and influences the cash rate through its financial market operations.

The subsequent policy meetings turned out with the RBA leaving interest rates unchanged but did not rule out rate cuts at its future policy meetings. RBA Policy Decision – Reasons for a rate cut. The market consensus for a rate cut is based on the following

"Conditions in the global economy have improved over 2017. Labour markets have tightened and further above-trend growth is expected in a number of advanced economies, although uncertainties remain," Dr Lowe wrote.

"Recent data suggest that the Australian economy grew at around its trend rate over the year to the September quarter. "Business conditions are positive and capacity utilisation has increased. The outlook for non-mining business investment has improved further, with the forward-looking indicators being more positive than they have been for some time."

The Reserve Bank will get an update on Australia's latest economic performance when the ABS releases the September quarter economic growth data tomorrow.

The RBA boss also noted with approval a slowdown in Sydney property price growth, following tighter lending standards being introduced by the banking regulator APRA.

Investors, economists dismiss calls for higher rates

  Investors, economists dismiss calls for higher rates Stubbornly low inflation expectations are more of a worry to the central bank right now than the risk of a potential housing market bubble and bust, experts say.Last week the OECD urged Australian monetary policymakers to begin increasing official interest rates despite the absence of inflationary pressures in order to cool the housing market and prevent a further blowout in household debt levels.

The Reserve Bank of Australia slashed the official interest rate to a new historic low today of 1.75 per cent, with three of the four big banks set to pay it forward. Ms Koper said the RBA decision , hotly debated by economists in the lead-up to this afternoon’s announcement, could have gone either way.

2 reserve bank of australia . Firms’ investment decisions and interest rates . RBA ( Reserve Bank of Australia ) (2014), ‘The RBA ’s Business Liaison Program’, Bulletin, September, pp 1–5.

Data released by APRA today shows the dramatic effect that its regulatory crackdown has had on interest-only lending, which almost halved during the September quarter.

Cautious consumer the biggest concern for RBA

However, the one blight on the governor's outlook is the weak consumer sector.

"One continuing source of uncertainty is the outlook for household consumption," Dr Lowe lamented.

"Household incomes are growing slowly and debt levels are high." For that reason, given that consumption makes up around 60 per cent of the Australian economy, the majority of analysts do not expect the Reserve Bank to start raising interest rates until late next year.

Most economists only expect one rate rise next year and 10 out of 24 analysts expect rates to remain on hold into 2019, and potentially beyond.

Some prominent analysts, such as Westpac's chief economist Bill Evans, expect rates may remain steady into 2020.

The market is pricing in a 62 per cent chance of a rate rise by the end of next year, amid strong jobs growth this year, especially in full-time work, signs that the mining bust is near an end and business investment in other sectors is finally picking up.

Westpac to refund customers $11 million over mortgage errors .
Westpac will refund about 13,000 customers more than $11 million after it discovered home loan errors. Westpac said owner occupier interest only variable home loans customers were affected.The error led to customers continuing to make interest-only repayments on their mortgage after the interest-only period ended, rather than being switched to principal and interest repayments.As a result, customers were left with less time to repay the principal amount of their loans and would have also have paid more in interest.The bank said it uncovered the error as part of an ongoing review.

Source: http://au.pressfrom.com/news/money/-48690-rba-interest-rates-decision/

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