BREAKING: RBA Announcement

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November, 2020: 

The Reserve Bank of Australia (RBA) has cut the official cash rate by 15 basis points today, taking it to a new record low of 0.10 per cent.

It's the third time interest rates have been cut this year.  In January 2020, the official cash rate was 65 basis points higher at 0.75 per cent.

RBA Governor, Philip Lowe, said the dire state of the Australian economy meant people should not expect the cash rate to go up again for three years. He committed the RBA to the “national priority” of growing jobs and wages.

“Given the outlook for both employment and inflation, monetary and fiscal support will be required for some time,” Lowe said. “For its part, the board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range.

“For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. Given the outlook, the board is not expecting to increase the cash rate for at least three years.”

Whilst the decision may appear to be good news for borrowers, the current low interest rate environment has already placed increased pressure on deposit customers, such as retirees who rely on the interest income from their deposits.

In setting our interest rates a number of factors must be considered, therefore a decision cannot be rushed as we aim to strike the right balance in providing value to all members, plus still remaining financially sustainable for the future for all of our customers.

South West Credit will make a decision over the next few weeks when markets have absorbed the impact of the RBA decision with any rate changes to take effect from the 1st December, 2020.

For the official RBA article, please visit the Reserve Bank’s website.


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