Reserve Bank leaves rates on hold for now

Cash rate stays at August 2016 low of 1.5%
A rising AUD is an issue but not enough to force a cut
The lender crackdown on interest-only loans remain a more significant issue for older homeowners

Sydney, New South Wales (1 August 2017) The Reserve Bank of Australia today left the cash rate at a record low of 1.50%.

Angus Raine, Executive Chairman of Raine & Horne said it appears the RBA doesn’t consider the Australian economy to be strong enough to justify tightening the cash rate.

“That said, with the Australian dollar nudging $US0.80, there are plenty of international investors who appear to like the cut of Australia’s economic jib,” said Mr Raine.

“And why not with inflation at 1.9%, which is below the RBA’s target range of 2-3%. Add our steady unemployment at 5.6%[i], and Australia’s comparative political stability, and we look pretty good when judged against many other global economies.”

The RBA will monitor the higher Australian dollar, but its trajectory won’t be enough to force a cut any time soon, noted Dawn Inanli, General Manager, Raine & Horne Financial Services.

“The clampdown by lenders on interest-only loans continues to be a more significant threat to owners with mortgages,” she said.

“While this crackdown will have a negligible impact on the wider real estate market, older owner-occupiers with interest-only mortgages, might be squeezed financially if the lenders start forcing them to make principal and interest repayments,” said Ms Inanli.

“If your lender is imposing new restrictions on your mortgage, and you’d like some advice about your options, contact Raine & Horne’s financial services arm, Our Broker on 1800 913 677.”

-ENDS-

For further media information please contact:

Angus Raine, Executive Chairman, Raine & Horne on 0409 920 697

Dawn Inanli, General Manager of Raine & Horne Financial Services on 02 9258 5400

[i] http://www.abs.gov.au/ausstats/abs%40.nsf/mf/6202.0