The RBA Leaves Mortgage Interest Rates On Hold

The RBA Leaves Mortgage Interest Rates On Hold

The RBA Keeps Mortgage Interest Rates On Hold.
Some welcome relief for mortgage holders today, as the Reserve Bank Of Australia announced that the official cash rate would remain unchanged at 4.75%.
Reserve Bank governor Glenn Stevens noted too that inflation seems at this stage is under control. There is still some volatility in the international finance markets, most notable in parts of Europe. He did state though that the Chinese and Indian economies have continued to grow, so there maybe some inflationary concerns in the future.
Glenn Stevens also noted, with the subsequent interest rate increases with most lending institutions, that current mortgage interest rates are now a little above the average. Lets hope more rate increases are along way off. With no RBA meeting in January, mortgage holders will have a small reprieve till at least February 2011.
The statement by Glenn Stevens, Governor: Monetary Policy Decision.
At its meeting today, the Board decided to leave the cash rate unchanged at 4.75 per cent.
Since the previous Board meeting, concerns about the creditworthiness of a number of European governments have again become the main focus of financial markets, with a marked rise in sovereign bond spreads for some euro-area countries and an increase in volatility. At the same time, recent data suggest that the Chinese and Indian economies have continued to grow strongly and price pressures, particularly for food, have picked up in China as well as a number of other economies in Asia. Modest growth is continuing in the United States.
For Australia, the terms of trade are at their highest level since the early 1950s, and national income is growing strongly as a result. Recent information indicates that, as had been expected, private investment is beginning to pick up in response to high levels of commodity prices. In the household sector thus far, there continues to be a degree of caution in spending and borrowing, which has led to a noticeable increase in the saving rate. Asset values have generally been little changed over recent months and overall credit growth remains quite subdued, notwithstanding evidence of some greater willingness to lend.
Employment growth has been very strong over the past year, though some leading indicators suggest a more moderate pace of expansion in the period ahead. After the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year.
The exchange rate has risen significantly this year, reflecting the high level of commodity prices and the respective outlooks for monetary policy in Australia and the major countries. This will assist, at the margin, in containing pressure on inflation over the period ahead. Over the next few quarters, inflation is expected to be little changed, though it is likely to increase somewhat over the medium term if the economy grows as expected.
Following the Board's decision last month to lift the cash rate, and the subsequent increases by financial institutions, lending rates in the economy are now a little above average. The Board views this setting of monetary policy as appropriate for the economic outlook.
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