Rates stay on hold – for now
Rates stay on hold – for now
Posted on Tuesday, February 05 2013 at 1:51 PM
The official cash rate remains unchanged at three per cent following a meeting of the Reserve Bank of Australia (RBA) today.
Contained
inflation, more optimistic economic news out of the United States, Europe and
China and a more robust housing market here at home are likely to have
contributed to the RBA Board’s decision.
The
majority of economists had tipped today’s decision but remain confident of
further interest rate reductions throughout the rest of the year.
Some
commentators are predicting total cuts of up to 100 basis points in 2013.
Loan
Market corporate spokesman Paul Smith says despite today’s decision, some
lenders may toy with the idea of making their own movements.
“With the cost of
funds pressure easing for many lenders, there’s an opportunity for them to make
adjustments to their variable rates in attempts to attract new customers,”
Smith says.
“The action or
inaction from lenders in the following weeks could be indicative of what’s in
store for interest rate movements over the next several months.”
Raine
and Horne chief executive officer Angus Raine says the RBA’s year-long focus on
whipping up consumer sentiment might be starting to bear fruit.
“Already
(this year) there’s evidence that buyer demand is collecting speed as the two
rate cuts in October and December continue to flow through,” Raine says.
“At
the same time, our offices are reporting a shortage of homes for sale, which
should help push up prices by as much as seven per cent in some markets in
2013.”
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