RBA tipped to keep cash rate at 2% due to inflation

According to expert investment dealer TD Securities inflation rose by 0.2% last month, resulting in the inflation gauge growing by an ideal 2% in the 12 months to December.

Chief Asia-Pacific Macro Strategist, Annette Beacher said given these figures of inflation, the RBA will probably keep the rates as is when they meet to decide on the cash rate next month.

“We remain of the view that the RBA is likely to leave the cash rate at 2% this year,” she said. “Although, the rocky start to the year has increased the odds that [should the RBA make a] rate cut [it would] prove to be beneficial.”

The Chief Strategist also noted that while the weak Aussie dollar boosted imported prices, domestic inflation counteracted it nicely in December.

According to TD Securities, inflation was evident in the prices of goods and services. December in Australia saw fruit, vegetables, meat and seafood increase by 0.8%, and holiday travel and accommodation by a seasonal 2.3%. This was offset by the falling price of fuel by 3.1%, non-alcoholic drinks by 2.7% and rent by 0.9% in December.

RELATED: Lack of confidence in the Chinese Economy sends Aussie sharemarket into a panic

As predicted in light of the Chinese Yuan currency dip, the Aussie dollar has also been affected. In fact, as the Sydney Morning Herald reported yesterday, the dollar dipped to the lowest level last week since 2009.

Like the RBA consensus, TD Securities has predicted headline inflation this quarter will increase by 0.3%, which is 1.7% more than a year ago. They also forecast the underlying inflation to increase by 0.5% in the quarter, making that an annual ideal rate of 2.0%.

If interest rates are in your periphery and you’re wanting to secure a competitive rate to buy property or refinance, head to Mozo’s home loans hub to compare now.

Home loan comparisons on Mozo - last updated 29 March 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.40% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

    Compare
    Details
  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

    Compare
    Details
  • Mozo Expert Choice Badge
    Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a.
    fixed 2 years
    6.24% p.a.

    Secure a low rate and enjoy the certainty of repayments, with the BCU Fixed Rate Home Loan. Save with no ongoing annual fees. Pay up to $25,000 extra during a fixed period (T&Cs apply). Lock in for up to 5 years.

    Compare
    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.