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Reserve Banks Interest Rate Policy Decision

Reserve Banks Interest Rate Policy Decision

At its meeting yesterday, the Reserve Bank Board decided to leave the cash rate unchanged at 2.5 per cent.

Growth in the global economy is continuing at a moderate pace, helped by firmer conditions in the advanced countries. China’s growth remains generally in line with policymakers’ objectives. Commodity prices in historical terms remain high, but some of those important to Australia have declined this year.

Financial conditions overall remain very accommodative. Long-term interest rates and risk spreads remain very low. Emerging market economies are receiving capital inflows. Volatility in many financial prices is currently unusually low. Markets appear to be attaching a very low probability to any rise in global interest rates, or other adverse event, over the period ahead.

Reserve Banks Interest Rate Policy Decision

In Australia, growth was firmer around the turn of the year, but this resulted mainly from very strong increases in resource exports as new capacity came on line; smaller increases in such exports are likely in coming quarters. Moderate growth has been occurring in consumer demand. A strong expansion in housing construction is now under way. At the same time, resources sector investment spending is starting to decline significantly. Signs of improvement in investment intentions in some other sectors are emerging, but these plans remain tentative as firms wait for more evidence of improved conditions before committing to significant expansion. Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend over the year ahead.

Interest rates are very low and for some borrowers have continued to edge lower over recent months. Savers continue to look for higher returns in response to low rates on safe instruments. Credit growth has picked up a little, including most recently to businesses. The increase in dwelling prices has been slower this year than last year, though prices continue to rise. The exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy.

Brokers turning back first home buyers

Brokers turning back first home buyers.

I’ve just heard that some brokers are turning back first home buyers due to the changing goal posts within the banking system. First home buyers are just to hard for some.

This is not surprising. Currently I have a first home buyer who has extended their finance four times. We are now at just over 30 days, when they were told by the banks that they were preapproved.  When they applied the goal posts were changed.  Frustrating.

Brokers turning back first home buyers

If you are a first home buyer my recommendation is for you to go straight to the bank.  Brokers have no loyalty to banks and hence, banks are not making life easy for their clients.

…ask Madeleine for more information bycommenting on this post.  Cheers