Bridging Finance: A short-term loan that covers a financial shortfall during time between the purchase of a new property and the sale of an old property.
RBA Expected to Maintain Current Interest Rate Amid Economic Jitters
RBA Expected to Maintain Current Interest Rate Amid Economic Jitters
1
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Tuesday's meeting of the Reserve Bank of Australia (RBA) is anticipated to maintain the current cash rate at 4.35%.
However, borrowers are being advised to brace themselves for possible future rate hikes as the board remains cautious about future economic shifts.
According to Gareth Aird, Head of Australian Economics at Commonwealth Bank, the rate is likely to stay the same for now, but the RBA’s stance might still be open to future changes based on evolving economic data. "We expect no changes to the cash rate but the board will likely state that it remains vigilant on potential inflationary pressures," Aird predicts.
Should Aird's projections hold true, the RBA would keep the rate at a 12-year high, aiming to bring inflation down to its 2-3% target by mid-2026.
"The likelihood of a rate change is minimal," Aird noted, stressing that RBA Governor Michele Bullock usually echoes the same sentiment about remaining alert to inflation risks while acknowledging GDP growth uncertainties.
Relief washed over Australians on Wednesday when the Consumer Price Index (CPI) for June revealed a slight increase from 3.6% to 3.8%, which, while still higher than RBA's goal, aligns with their forecasts. More crucially, the core inflation rate-or the trimmed mean CPI-dipped slightly from 4% to 3.9%.
The quarterly August Statement of Monetary Policy, to be released concurrently with the cash rate announcement, includes the federal government’s $300 energy rebate. Stephen Wu of CommBank suggests this could potentially lead the RBA to revise headline inflation figures downward, while predictions for the underlying CPI would likely remain static.
"The statement will probably reaffirm that the path for interest rates remains uncertain," Wu wrote, acknowledging any favorable inflation data would still keep the existing narrative intact and deter immediate changes in policy.
This cautionary approach persists despite predictions from some economists about a possible rate decrease before Christmas. Financial services website RateCity has advised borrowers to acquaint themselves with the prospect of another rate hike, given the stubborn nature of inflation.
RateCity’s research director, Sally Tindall, highlighted that even a modest rise of 25 basis points would add approximately $75 to monthly payments on a $500,000 mortgage, accumulating to a total of $1,285 in increased payments since May 2022.
For instance, those with a $750,000 mortgage would face monthly increases of around $112, pushing the total rise in payments to $1,928 during the same period.
"This scenario aligns well within the RBA’s planned timeline but also underscores the urgency should inflation rates not decline soon," Tindall said, urging vigilance and preparedness among borrowers.
Treasurer Jim Chalmers has avoided making specific predictions ahead of Tuesday’s RBA decision, despite acknowledging that the recent inflation readings showed encouraging signs amid continuing cost-of-living challenges.
Shadow Treasurer Angus Taylor, meanwhile, has criticized the government’s spending habits, blaming increased government expenditure for feeding inflation. "The government must complement the RBA’s efforts by controlling fiscal policy, and their failure to do so leaves Australia lagging behind other G10 countries," he said.
For ongoing updates, you can visit the original publication on TheIntercept.com.
Published:Monday, 5th Aug 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at mitigating risks in the housing market. Effective February 2026, APRA will impose a cap on high debt-to-income (DTI) home loans, limiting such loans to 20% of new home lending. This measure applies to both owner-occupiers and investors, with an exemption for new housing developments. - read more
The Reserve Bank of Australia (RBA) has released its October 2025 Financial Stability Review, providing a comprehensive assessment of the nation's financial system amidst a backdrop of global uncertainties. The report underscores that while Australia's financial institutions remain robust, external factors pose significant risks that warrant vigilant monitoring. - read more
The Australian Financial Security Authority (AFSA) has reported a notable decrease in personal insolvencies for October 2025, signaling a positive trend in the financial health of Australians. A total of 1,116 new personal insolvencies were recorded, down from 1,169 in September 2025 and higher than 1,009 in October 2024. - read more
The Australian mortgage market has reached a new milestone, with the total value of residential mortgages climbing to $2.41 trillion in November 2025. This growth is largely attributed to escalating property prices and a surge in lending activity. - read more
As Australians step into 2026, housing costs have emerged as the foremost financial concern, overshadowing other cost-of-living pressures. The latest Canstar Consumer Pulse Report reveals that 22% of respondents identified mortgage and rent expenses as their primary financial stressor, more than doubling the figure from five years ago. - read more
In light of the current economic challenges facing many Australians, managing credit card debt has become more crucial than ever. With rising living costs and financial uncertainty, accruing debt on high-interest credit cards can quickly escalate from a manageable inconvenience to a stressful financial burden. - read more
High-interest debt can feel like a relentless cycle for many in Australia, often making it challenging to gain financial ground. Whether it's credit card debt, personal loans, or other forms of borrowing, the compounded interest can quickly become overwhelming. Fortunately, debt negotiation presents a viable solution for those caught in this dilemma, offering a ray of hope to reduce financial burden. - read more
In the realm of financial wellness, tracking your monthly expenses is a crucial step towards effective debt management. Many Australians grapple with the challenges of keeping their debts under control, particularly in a dynamic economic environment. - read more
Budgeting is the process of creating a plan to manage your money. Essentially, it allows you to allocate your income towards expenses, savings, and other financial goals. By keeping track of where your money goes, budgeting helps you ensure that you are not overspending and are prepared for future financial needs. - read more
Welcome, readers! We're here to talk about something incredibly important yet often overlooked: improving your credit score. Your credit score is a financial report card used to evaluate your creditworthiness, and it can have a significant impact on your ability to secure loans, mortgages, and even rental agreements. - read more
