The Reserve Bank has announced that the official cash rate will remain at 2.5% yesterday, citing the inflation data remaining at manageable levels, around the target of 2 – 3%.
The RBA’s governor Glenn Stevens said that the country’s monetary policy has been aligned with the current needs of the market, with credit growth and dwelling prices increasing significantly. This period is crucial as a stable interest rate will benefit borrowers.
Despite these favourable results, the board of the RBA is nearly unanimous that rate hikes will be imminent for 2015, with forecasts up to 3.25%. Data from the mining sector has been a factor, as the recent capital expenditure report shows a drop by almost 9% for the March quarter, a clear indication that the mining boom has passed.
Read more about this on the Business Spectator website.