Interest Rates
20 Jul 10
The Reserve Bank of Australia (RBA) decided to leave official interest rates unchanged this month following their monthly board meeting. The result being that the average standard variable interest rate remains at the current level of 7.4%. In their statement, the RBA Governor highlighted that, “the global economy has continued to expand over recent months, consistent with a trend pace of growth. The expansion remains uneven, with the major advanced countries recording only modest growth overall, but growth in Asia and Latin America, to date, very strong. There are indications that growth in China is now starting to moderate to a more sustainable rate.”
The Governor’s statement also commented that, “credit outstanding for housing has continued to expand at a solid pace, but dwelling prices are rising more slowly than earlier in the year.” This final comment on dwelling prices has been evidenced by the RP Data-Rismark Hedonic Home Value Index which has recorded much lower levels of growth during April and May of this year. We believe that inflation figures due to be released on the 28 July will be the key determinant of the RBA’s next interest rate move. The ASX Cash Rate Futures Market is currently showing an expectation of a fairly stable interest rate environment over the second half of 2010 with the potential for some easing of official interest rates.
Source: RP Data