Reserve Bank governor Glenn Stevens’ final official cash rate decision has been a case of steady-as-she-goes.
The central bank left the rate on hold at 1.5 per cent on Tuesday, as widely expected, following its 25 basis point cut in August.
This was the result the market expected. All 38 economists and experts surveyed by finder.com.au before the decision correctly predicted the outcome. As did all 13 economists surveyed by the AAP newswire.
The rate remains at the lowest rate in Australian history, and reflects challenging global economic conditions.
The RBA has cut twice in the past four months in a bid to boost sluggish inflation.
The headline inflation figure was 1.0 per cent for April-June — below the central bank’s target of 2-3 per cent.
This was Mr Steven’s last RBA board meeting. He will step down as governor on September 17 after 10 years in the role, and will be replaced by Dr Philip Lowe.
After the uneventful RBA meeting, the eyes of all economists will be on Wednesday’s GDP growth figures for the June quarter. Many have predicted 0.4 per cent growth for the quarter, which would bring the annual growth rate to 3.2 per cent.
Despite the rate hold, a finder.com.au spokesperson predicted that the value of home loans in Australia would increase.
“In the months directly following the last 10 RBA rate cuts prior to August 2016, the average home loan size in Australia increased seven times and the first home owner loan size rose eight times,” finder.com.au insights manager Graham Cooke said in a recent statement.
“The average increase in first home owner loans was 1.57 per cent, with the most significant increase in June 2016, when loan sizes increased by 3.6 per cent directly following the May 2016 rate cut.”
The average home loan in Australia is currently worth $360,000, according to finder.com.au.