Lowest rates ever in australia

The Reserve Bank of Australia has today(07 may 2013) decided to cut the official cash rate by 25 basis points to 2.75%, taking the cash rate to a record low..

A rate cut by the RBA,given clear concerns over the high Australian dollar, weakness in construction and manufacturing activity, along with a prospective shortfall in the government’s budget is just about right.

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Last week saw the Reserve Bank of Australia being the latest central bank to engage in further monetary easing, cutting the benchmark interest rate to 2.75 percent, the lowest level in living memory

A contraction in retail sales in March, along with a decline in job advertisements in April, and consequent upward pressure on unemployment has surely helped  RBA decision to cut rates.

New Bureau of Statistics figures show loans to owner-occupiers rose by 5.2 per cent from February to March, in seasonally adjusted terms.

And Governor Glen Stevens was “ cited strength in the Aussie dollar as ‘unusual given the decline in export prices and interest rates’.

The cut in the base rate by the RBA will also benefit other sectors, including the domestic housing industry, as banks pass this on to borrowers. This should also benefit small business , Housing in regions which have been hit by the high Australian dollar as well (particularly Queensland) will effectively receive a double kick.

The Board's decision therefore seems to be an attempt to boost consumer confidence and incentivise growth, both of which will hopefully fend off an inflation blow-out.

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