API Blog :: Have your say!

June 11, 2010

What’s going to happen to interest rates?


Why has the Reserve Bank decided to hold rates and how does it compare to previous cycles?

BY MICHAEL YARDNEY

By now you would know that the Reserve Bank of Australia (RBA) has left interest rates on hold for the first time in four months, leaving the cash rate at 4.5 per cent.

This was really no surprise, considering rates have moved up six times since last October and are now starting to have some effect.

There’s clear evidence that consumer sentiment has fallen, our property markets are slowing down and some segments of the retail sector are hurting. Add to that the uncertainty surrounding the impact of the new resources super tax and the issues facing a number of European economies, and it was clearly time for the RBA to step back to see how things pan out.

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