RBA Passes On Melbourne Cup Flutter

By Alison Orman on Nov 08 2016


he RBA have moved interest rates 6 out of the last 10 Melbourne Cup's, however this year they were heavily backed to hold rates steady.

The RBA have moved interest rates six out of the last 10 Melbourne Cup's, however this year they were heavily backed to hold rates steady. A slight rise in inflation and the strong performance by a number of capital city property markets has allowed the RBA to maintain their current monetary policy position; holding the steady record low at 1.50%.

The very low rate of inflation remains the major concern for the RBA. Traditionally, they would rectify this by cutting interest rates, however, the RBA has it’s hands tied. The effects of cutting interest rates have diminished and this no longer provides a boost to the business investment and consumer spending. Secondly, the RAB needs to ensure that property price growth is contained, specifically in Sydney and Melbourne.

We expect interest rates to remain stable over the remained of 2016 and into the start of 2017 thanks to the stability of most domestic economic indictors (inflation aside), although if Trump becomes US President next week anything is possible.

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