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RBA keeps interest rates steady

interest rates
The Reserve Bank keeps rates steady, however the door remains open for further rate rises depending on inflation figures due out later this month.

The decision was widely expected by analysts who said the RBA needed more time to see the effects of its three rates rises since November. Consumer price data for the March quarter, due out on April 23, will also influence whether rates rise again next month.

For borrowers, already hit by commercial banks raising rates even more than official increases, that means more weeks of worry as they await further bad news about their debt costs.

This year alone, the February and March rate rises by the RBA added about $110 in monthly repayments for a standard $300,000, 25-year mortgage.

While noting the economy remains strong, with employment continuing to grow, RBA Governor Glenn Stevens said in a statment that the series of rate increases is providing ”tentative evidence that growth in domestic demand is moderating. Business and consumer sentiment have softened in the early part of 2008, and credit demand has slowed somewhat,” the statement said.

Still, inflation remains a major concern for the bank, particularly in coming months….more

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