Official Interest Rate Holds at 2%
Good news for borrowers and property investors!
The Reserve Bank Board met for the first time this year on Tuesday 2 February and kept the official interest rate on hold at 2%, despite recent market concerns about global growth.
Other economic data considered by the Board:
- The Australian unemployment rate for December was stable at 5.8% and strong jobs growth over the last quarter of 2015, justifying the RBA’s decision.
- The Australian GDP: the Third quarter GDP of 2.5% surprised many – expect it to adjust modestly down on weaker commodity prices, which impacts Australia’s national income, and therefore household income and spending.
- China’s economy continues its growth – The latest official GDP release showed the Chinese economy growing at 6.9%. This stands in contrast with many who predict a slowdown in that growth.
- Australian dollar depreciates further – which has assisted Australia’s economy’s re-balancing with improving growth from the services sectors which are typically export orientated.
- Forecast: expect rate cuts in May and August.