Interest rates: RBA leaves on hold but here’s why it’s not all good news
The Reserve Bank has left interest rates on hold for a second straight month after inflation fell.
Outgoing Governor Philip Lowe’s second last board meeting opted to leave the cash rate at an 11-year high of 4.1 per cent, hinting increases may be a thing of the past.
‘The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so,’ he said.
While this was the third pause in 2023 so far, rates have still climbed 12 times since May 2022, marking the most aggressive pace of monetary policy tightening since 1989.
A borrower with an average, $600,000 mortgage has seen their annual repayments surge by $17,796 in just 15 months.
The Reserve Bank has left interest rates on hold for a second straight month after inflation fell
But the rate rises appear to have reduced inflation, which fell to 6 per cent in June, down from 7 per cent in the March quarter and a 32-year high of 7.8 per cent at the end of 2022.
Three of Australia’s Big Four banks – Commonwealth, Westpac and NAB – has wrongly expected a rate rise on Tuesday but the futures market had regarded an increase as a 14 per cent chance.
