Spring has spring but the Reserve Bank of Australia has decided to hold the official cash rate at 0.25%, with the record low rate expected to boost buyer activity this spring selling season, despite the coronavirus crisis.
Following the bank’s monthly meeting on 1 September, RBA governor Philip Lowe confirmed official rates would remain where they have been since March.
The meeting comes ahead of new data, to be released on Wednesday, which is set to confirm Australia’s first recession since the early 1990s.
The Board decided to maintain the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. It also decided to increase the size of the Term Funding Facility and make the facility available for longer – https://t.co/vyYxRYDdz5
— RBA (@RBAInfo) September 1, 2020
However, in a statement following the meeting the RBA said: “As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now under way in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy,” the statement read.
Record low interest rates are expected to encourage more buyers to market this spring selling season. Picture: Getty.
More to come.
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