The Reserve Bank has kept interest rates on hold at 4.75% as a result of worrying developments in Europe and the US as well as unexpected weak domestic activity that was recently announced.
In their media release, there was a noticeable change in wording used to describe the economy and the sense of urgency that was portrayed had also disappeared.
What does this mean? Well, it essentially means that at least for the time being, we will be spared from a rate rise for at least the next couple of months. Many market analysts have also hinted that a rate rise is unlikely to occur before October 2012.
Whilst weak economic data seemed to have held off a rate rise for the time being, the RBA governor, Glenn Stevens, noted that the central case for the RBA to increase interest rates was still present because of the looming investment boom in an economy with limited spare capacity culminating with very strong growth in the Asian region.
Hey, Alfred here – Did you enjoy my latest article? Do you have any questions or Feedback for me? Call me on (02) 9266 2269 or Book an Appointment online.
Remember that our first meeting is cost and obligation free.
