Rate Hold Reflects Stable Local Economy
The Reserve Bank of Australia (RBA) keeping official interest rates on hold reflects the stable domestic economic environment, says leading mortgage broker Loan Market.
Loan Market Corporate Spokesman Paul Smith said today’s decision by the central bank’s board was no surprise as most economists had expected the RBA to leave the cash rate at 4.25 per cent.
While a rate cut would help certain sectors, the overall performance of the economy is within targeted areas, including employment and inflation, Mr Smith said.
There are still concerns about the economic situation in Europe where the debt crisis remains largely unresolved.
But in Australia we are seeing consumer sentiment move away from the pessimistic tone that was previously displayed when the Euro crisis first emerged.
Mr Smith said the official interest rate in Australia was still well below the average level over the past 20 years.
While the situation in Europe continues to develop and domestic numbers remain in check, the RBA still has plenty of room to move, he said.
The central bank is well positioned to combat any fall out from any negative influences on the Australian economy.