Australia Inflation Expectations Remain High. Australia Jobless Rate Highest in 6 Months. Australia Building Permits Down 4. Australia New Home Sales Jump Forecast Indicators News. More Indicators. National Statistics World Bank. We have a plan for your needs.
Standard users can export data in a easy to use web interface or using an excel add-in. API users can feed a custom application. White label accounts can distribute our data. We Are Hiring. Trading Economics welcomes candidates from around the world. Current job openings:. Interest Rate. Money Supply M1. Money Supply M0. Interbank Rate. Tweet Facebook Mail. The Reserve Bank of Australia has kept Australia's interest rate on hold at the record-low level of 0.
RBA economists met this afternoon, deciding to keep the nation's cash rate on hold for the 12th month running. In his monetary statement, RBA Governor Philip Lowe said the central bank was keeping a close eye on the housing market, but was waiting for more sustained inflation before shifting interest rates. Despite maintaining the status quo of interest rates today, many speculate that a hike in Australia's official interest rate could come earlier than the forecast date of At the time Mr Lowe said that interest rates would not be hiked up until the bank was satisfied there was a sustainable increase in inflation — but that won't occur until wages growth experiences an equal boom.
After the RBA's decision, the yield on Australia's three-year bond slipped to around 0. This is still around 10 times higher than where the RBA wants market interest rates to be. In the past week, investors have been selling off their short-term bonds, causing their yield or returns to skyrocket.
There is an inverse relationship between the price of a bond and its yield. Essentially, the RBA has capitulated to market forces, with its decision to not buy any more April bonds which it previously did for the purpose of artificially driving short-term rates lower.
CommSec senior economist Ryan Felsman said "the lift in short-term market interest rates has already fed through to fixed rate mortgage increases, as overseas interest rates lift with global central banks continuing to tighten monetary policy settings". He also warned that "the rollover or refinancing of fixed rate mortgages could eventually see mortgage holders confronted with significantly higher borrowing costs and repayments".
In the past month, 26 lenders have lifted their fixed rates, "with the majority of rate increases on 2- to 5- year fixed terms", said Sally Tindall, research director of comparison website RateCity. However, he said the RBA's decision to abandon yield curve control was due to "improvement in the economy" and the "earlier-than-expected progress towards the inflation target" 2 to 3 per cent.
Dr Lowe has repeatedly said: "The [RBA] Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. This is likely to take some time. In previous statements, the governor consistently said rates are unlikely to be lifted "before ".
He did not make that reassurance this time. However, Dr Lowe attempted to play down rate hike speculation by emphasising that Australians are unlikely to see meaningful pay rises for some time.
The Australian dollar fell to We acknowledge Aboriginal and Torres Strait Islander peoples as the First Australians and Traditional Custodians of the lands where we live, learn, and work. Key points: The central bank has abandoned its efforts to achieve "yield curve control" It involved the RBA buying three-year government bonds to artificially lower their yields A sharp rise in inflation contributed to the RBA's decision to wind back COVID stimulus.
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