RBA leaves interest rates on hold as the Federal Government prepares to hand down the 2019 Budget
April 2019: RBA Cash Rate Decision Announced
There may have been some suggestion of a possible interest rate cut this month, but in the end the RBA chose to keep the official cash rate on hold stating that:
'The outlook for the global economy remains reasonable, although growth has slowed and downside risks have increased'.
The cash rate remains at the record low of 1.5%pa.
The official cash rate is determined by the Reserve Bank of Australia (RBA) at a Board Meeting on the first Tuesday of every month (except for January).
The cash rate is generally the lowest interest rate at which banks borrow from each other and is used as a benchmark rate for banks around the country. Besides affecting the interest being charged on your loan by the banks, it is also closely tied up with employment & jobs, inflation and the performance of the economy. When making the cash rate decision, the RBA takes into consideration a number of factors including whether the economy is performing well, needs to be slowed down or if it needs a push.
Experts continue to predict a cut at some stage this year but it will be interesting to see how the economy performs as the Federal Government hands down its 2019 Budget later today and also as we head in to the May Federal Election.
One of the hot topics of the 2019 Federal Election is Labor's proposed changes to Negative Gearing and Capital Gains Tax. A recent study by SQM Research, suggests that the proposed changes will result in increased rents and a decline in property prices. Decisions by the RBA on the cash rate will also play a role in determining what the overall impact of these tax reforms will have on the property market and economy. Click here to learn more about the Labor's proposed tax changes.
Get in touch with us today if you'd like to know more.