The RBA has once again decided to hold to cash rate this month at 4.10%
The man has delivered! In his last month as the RBA Governor, Phillip Lowe has dropped the mic…but held the cash rate at 4.10%
Talk about going out on a high.
That means the cash rate has been kept at 4.10% for the last not one, not two…but three RBA meetings.
It’s giving…cost of living stability.
This is HUGE. Because the RBA hasn’t kept the cash rate steady for this long since early 2022.
And with three months of a steady cash rate, we’re seeing a clear signal that prices are finally cooling down.
In fact, inflation has dropped to its lowest level in 17 months, with the annual rate sitting at 4.9% as of July.
Australians since last year waiting for inflation to drop
This has mainly been led by a drop in prices for fresh produce and automotive fuel.
So mortgage holders, sit down, take a deep breath because your mortgage is staying put this month. Phew.
Luckily the RBA’s decision was also in line with what experts were expecting.
In fact, for a change, all four big banks predicted the same thing, for the RBA to hold the cash rate.
We are in the clear for now thankfully, but we can’t rule out the possibility of a future cash rate rise, as the RBA’s target inflation rate is still 2-3%.
When the RBA increases the cash rate, the banks will almost always follow suit and raise the interest rate on your loan.
Experts say it takes around two or three months for individuals to feel the full impact of a rate rise on their cash flow… so the impact of these successive rises won’t be felt until the new year.
And your interest rate on your savings account should increase too (but often doesn’t increase to the same extent).
You’re not imagining it, they are! But it probably feels even higher because as recently as May 2022, interest rates were at a historic low of 0.1%.
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