RBA low­ers in­ter­est rates

Port Douglas & Mossman Gazette - - FRONT PAGE -

THE Re­serve Bank (RBA) last week low­ered of­fi­cial in­ter­est rates by 25 ba­sis points to 2.75 per cent.

De­spite the cash rate mov­ing to his­toric lows, the aver­age stan­dard vari­able mort­gage rate, which is now likely to be 6.2 per cent, is still 45 ba­sis points higher than the 2009 lows.

Over­all it ap­pears that the RBA cut in­ter­est rates be­cause the ex­change rate re­mains high mak­ing busi­ness tough for ex­porters and be­cause eco­nomic growth and in­fla­tion is at be­low trend lev­els pro­vid­ing the RBA with the nec­es­sary im­pe­tus to cut rates. Some of the com­ments sug­gest that there may be ad­di­tional in­ter­est rate cuts to come; that is the view of fi­nan­cial mar­kets, which are pric­ing in an­other rate cut around Au­gust ac­cord­ing to the ASX cash rate fu­tures im­plied yield curve.

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