Australia cuts interest rates to new low of 1%

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"But, I wouldn't expect any lenders to make an announcement like this inside the ten-minute mark, as we saw after the June cash rate cut was announced", he added.

For an owner-occupier customer with a standard variable home loan of $400,000 on principal and interest repayments, the.20% p.a. rate reduction will result in a saving of $800 each year.

Mr Frydenberg rejected Labor's suggestion the cut showed the economy was struggling under the coalition.

At an worldwide level, manufacturing took another knock at the end of the second quarter, signaling a worsening economic growth outlook that could force the world's major central banks into action.

It's the first time since 2012 that the RBA has cut interest rates twice in consecutive months. Yet the Australian dollar did not react to the news in the expected manner, rising after the event, not falling.

The RBA chief painted a downbeat picture of the world economy, highlighting risks stemming from uncertainty around trade and technology disputes between the United States and China.

For the second month in a row, the Reserve Bank has slashed interest rates.

- RBA calls for fiscal support to outlook, says will cut again if needed.

While some long-touted tax rebates are due in the next month or so a slew of much larger tax cuts are not planned until 2024, far too distant to have any impact on consumer spending now.

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Hardest hit will be the roughly three million people in Australia who rely on interest from their savings to get by, about one million of whom are "very reliant", according to Digital Finance Analytics founder Martin North.

Still, investors were hesitant to keep buying the Australian Dollar back to its best levels.

If passed on in full, the quarter percentage point cut would save A$58 a month in repayments on a A$400,000, 30-year mortgage, but ANZ was the only major bank to match the rate cut on Tuesday after failing to pass on the full benefit to customers when the central bank cut rates in June.

As for the US Dollar, today's US non-manufacturing PMI from ISM, and Friday's key Non-Farm Payrolls report for June, could influence Federal Reserve interest rate cut bets and the US currency's movement.

"A treasurer that looks at a cash rate of 1 per cent and pretends everything is hunky dory is a rubbish treasurer".

So far, the conservative government of Prime Minister Scott Morrison has played down the need for stimulus, instead reaffirming a political commitment to budget surpluses.

"Conditions in most housing markets remain soft, although there are some tentative signs that prices are now stabilising in Sydney and Melbourne".

"The problem we have in this country is that Australians are worried about their mortgages, they're worried about their wages, they're worried about the slowing economy", Chalmers said.

It seems as though the RBA will continue to change its tune over the coming months as 'recent inflation outcomes have been lower than expected, ' but Governor Philip Lowe and Co. appear to be in no rush to reestablish a rate easing cycle as 'the central scenario remains for the Australian economy to grow by around 2¾ per cent in 2019 and 2020'.

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