Australia’s official cash rate has plunged to 0.10 per cent, marking the lowest interest rates in the nation’s history.
Economists of the Reserve Bank of Australia (RBA) today decided to slash rates in a bid to stimulate the country’s economy out of a COVID-19-driven recession.
It’s the third time interest rates have been cut this year. In January 2020, the official cash rate was 65 basis points higher at 0.75 per cent.
In his monetary statement, RBA Governor Philip Lowe said the reasoning behind the cut was to provide credit to more Australians.
“At its meeting today, the Board decided on a package of further measures to support job creation and the recovery of the Australian economy from the pandemic,” Mr Lowe said.
“With Australia facing a period of high unemployment, the Reserve Bank is committed to doing what it can to support the creation of jobs.
“Encouragingly, the recent economic data have been a bit better than expected and the near-term outlook is better than it was three months ago.”
The RBA said it intends to keep interest rates at 0.10 per cent for the next three years at least.
Graham Cooke, Insights Manager at Finder, said it’s the first time since 2011 that the central bank has cut rates on Melbourne Cup day.”
For the first time since 2011, the RBA has declared a Cup Day cut despite some skepticism from experts around the effectiveness of further monetary stimulus measures,” Mr Cooke said.”
But significant considerations like the strength of the Australian dollar and a lagging Victorian economy have supported the case for further easing.”
I suspect the horse races weren’t the only thing punters were betting on today.”
Treasurer Josh Frydenberg welcomed the rate cuts today, saying it will help families lift the country out of a recession.”
For someone with a $400,000 mortgage, the average across the country, what we have seen with today’s announcement where it has come from down 75 basis points to just 10, that is worth $1,000 a year for someone with a mortgage that size,” Mr Frydenberg said.”
Some of the banks have already priced in today’s announcement by the Reserve Bank, it had been highly forecast and highly expected.”
Australia’s interest rate – also known as the country’s “cash rate” – is the amount of money every bank has to pay on the money it borrows.
Typically when the RBA lowers interest rates, Australia’s major lenders follow.
The lower the interest rate on a loan you have with a financial institution, the less money you have to pay back.
So what does today’s cut mean for you?
HIA has welcomed the McGowan Government’s changes to the Building Bonus scheme to extend on-site starttimes to 12 months after signing a building contract. “This sensible move will smooth out the workflow in a win for consumers, jobs and business,” HIA WA ExecutiveDirector Cath Hart said today. “It takes pressure off consumers who were concerned […]
The significant stimulus offered by the State and Federal Governments Grants has led to unprecedented demand, which means if you’re serious about building in time to potentially qualify for the grants, you need to act now. Our mission to build quality homes, at affordable prices means that we are placing a limit on our building commitments […]
2020 will forever go down in history as the year an unprecedented health pandemic unexpectedly erupted, rapidly took over the world and brought about a whole new crisis, financial in nature. With the closure of cafes, bars, and other client facing industries, Perth businesses promptly changed gears to continue to service clients remotely. Pace of […]