Sydney 2nd July 2019 RBA decision
The cash rate has hit an all-time low! The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new low of 1 per cent, the second consecutive month it has cut rates.
In the official statement released by the RBA, it was stated that this decision is to support employment growth and provide greater confidence that inflation will remain consistent with the medium-term target. But what does that mean for the housing and credit sectors? Governor Philip Lowe had this to say: “Conditions in most housing markets remain soft, although there are some tentative signs that prices are now stabilising in Sydney and Melbourne. Growth in housing credit has also stabilised recently.
Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.” “Today’s decision to lower the cash rate will help make further inroads into the spare capacity in the economy.
It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”