The official cash rate has been left on hold at 2.25%, at today’s Reserve Bank of Australia board meeting.
This follows February’s RBA rate cut from 2.5% to 2.25%, which came after the official cash rate was kept on hold for 17 consecutive months - one of the longest periods of rate stability in Australian history.
So why is the RBA board leaving rates at record lows? One of the main reasons suggested by financial experts is a weak Australian economy, poor non-mining business investment and falling employment.
Governor Glenn Stevens said in a statement that growth is continuing at a below-trend pace, with domestic demand growth overall quite weak. As a result, the unemployment rate has gradually moved higher over the past year.
"The economy is likely to be operating with a degree of spare capacity for some time yet. With growth in labour costs subdued, it appears likely that inflation will remain consistent with the target over the next one to two years, even with a lower exchange rate."
"Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board will further assess the case for such action at forthcoming meetings."
Was your home loan lender naughty or nice after February’s rate cut? Mozo’s number crunchers were on the case and found that most home loan providers passed on the full 25 basis point rate cut to customers, with Westpac taking it one step further cutting all its variable rates by 0.28%.
Leading the charge with the best variable rate for home loans over $500,000 and an LVR below 80% was eMoney cutting its Prime Propack home loan by 25 basis points to a market low 4.20%.
In the fixed rate home loan world, Newcastle Permanent’s took out the top spot for its 1, 2 and 3 year fixed rates at 3.89%, 4.04% and 4.09%. As well as 4 and 5 year fixed rate home loans at 4.29%.
Want to see more great rate home loans? Discover your best home loan borrowing match, in Mozo’s home loan comparison tables here.
Savers across the country are sure to have heaved a sigh of relief at today’s news of no RBA rate cut because after the RBA reduced the official cash rate by 25 basis points last month, all of the big four banks slashed their savings account rates by 25 basis points, along with 45 other savings account providers.
While UBank cuts its USaver with Ultra Transaction Account to 3.77%, making it now the third best conditional ongoing rate, thankfully two of Australia’s best savings account providers, decided to leave their ongoing savings account interest rates as is.
ING DIRECT kept its Savings Maximiser at a market best 4.00%, as long as you link it with your Orange Everyday Account and deposit $1,000 or more a month. And RAMS’ 3.91% ongoing interest rate continued to shine, as long as you don't make any withdrawals and deposit at least $200 each month.
If meeting conditions isn’t your thing, then check out Rural Bank ONE's Saver with a 3.00% interest rate, the best non-conditional savings account rate in the market.
Want to see the other savings account saviours? Then search the savings account market today!
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