Considering the varying responses by the Banks to the recent RBA Interest Rate cuts there is little wonder why many borrowers are becoming confused and are asking:
“What is my new Interest Rate ?”
“How does my Interest Rate compare to other Banks ?” Read more
The Reserve Bank of Australia announced a further reduction in Interest Rates of 0.25% p.a. (25 b.p.).
This is the 2nd consecutive month in which the RBA has been forced to reduce the Official Cash Rate to stimulate the Australian economy, which continues to be challenged by low growth and the increasing cost of living.
A major bank economist has predicted as many as four more rate cuts before the end of the year.
Westpac chief economist Bill Evans has told Fairfax that the Reserve Bank could drop the official cash rate as low as 2.75% by the end of 2012. Evans said economic conditions are fragile, necessitating deep rate cuts.
“You can’t ignore what’s going on in the market. There’s a fair degree of disquiet. Monetary policy is too tight given the shock to confidence and fragility of the economy. Retail has lost its momentum, house prices have edged off, capital spending is quite soft excluding mining,” Evans said.
Evans forecast successive 25bp cuts in June, July and August, followed by one more before the end of 2012.
Australian Broker Online – 1/6/2012