Few were surprised this afternoon when, at their first meeting of the year, the Reserve Bank of Australia left interest rates on hold for the fifth consecutive month. The cash rate remains at a 60 year low of 2.5%.

Rates are expected to remain on hold for the foreseeable future until a clear economic outlook can be identified. Weak employment growth coupled with high inflation figures and a falling dollar present conflicting data and do not allow for any justified change in the cash rate.

The housing market continues to be spurred by low interest rates and by leaving rates on hold prospective buyers will be further encouraged to lock in historically low loan deals, especially as lenders are becoming increasingly competitive.


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