RBA delivers pre-Christmas rate cut

RBA delivers pre-Christmas rate cut

Posted on Tuesday, December 04 2012 at 2:56 PM

The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to three per cent, as economists had widely tipped.

It’s now at its lowest level since the
height of the GFC in 2009.

If passed on in full by lenders, the
reduction would equate to a $50 per month saving on a mortgage of $300,000.

RP Data senior research analyst Cameron
Kusher says the RBA likely responded to economic conditions rather than the
state of the housing market.

“Dwelling values are 2.1 per cent higher
than what they were at the end of May this year and there’s been a modest
uptick in transaction volumes, which suggests consumers are slowly responding
to the previous rate cuts,” Kusher says.

Economists are already discussing the
possibility of another rate cute in early 2013.

Treasurer Wayne Swan fired a pre-emptive
attack at banks this morning, urging them to pass on any official rate cut in

The RBA Board will next meet in February.

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