After some nervous moments last week prior to the release of the inflation figures, Australian economists were correct in predicting that the Reserve Bank would not move on interest rates this month. Today’s meeting sees the Board deciding to leave rates steady at 4.50%.
With interest rates on hold for a third consecutive month, National Australia Bank chief economist Alan Oster, said “We don’t expect really to see much (movement in rates) until the end of the year.”
Some are suggesting the RBA raised interest rates once too often earlier this year as it takes a few months for the impact of raising (or lowering) rates to work their way through the market.
Having said that the interest rate hikes in the fist half of this year have had the desired effect.
With an increased cost of their overseas funding, let’s hope that the banks don’t lift interest rates independently of the RBA.
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