The Reserve Bank of Australia (RBA) has left official interest rates unchanged at 3.50 per cent at its board meeting on August 7, 2012. The decision to hold comes for the second month in a row as Reserve Bank cited a more subdued international outlook than was the case a few months ago.
- Growth in the world economy softened since the early months of 2012.
- Australia's terms of trade have peaked nearly a year ago, though they remain historically high.
- Financial markets have responded positively to signs of progress, but Europe will remain a potential source of adverse shocks for some time.
- Share markets have remained volatile, but they have generally risen over the past couple of months in net terms.
- In Australia, most indicators suggest economy growth close to trend overall.
- Labour market data show moderate employment growth and the rate of unemployment has thus far remained low.
- Inflation remains low, with underlying measures near 2 per cent over the year to June, and headline CPI inflation lower than that
- Interest rates for borrowers have remained to be a little below their medium-term averages.
The Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate.
It's unlikely that any of the banks will increase their rates independently from RBA this time around, especially when many economists believe there is 75-100 basis points cuts on the cards in the next 12 months.
To figure out your home loan repayments for the current rates - please use our mortgage repayment calculator.