RBA 'unlikely to lower interest rates in near future'

The Reserve Bank of Australia (RBA) is not likely to sanction any further interest rate cuts in the next few months.

Minutes from the organisation's latest board meeting have been released and they seem to suggest that the central bank is comfortable with the current national cash rate of 3.5 per cent.

The RBA slashed interest rates by a total of 75 points in May and June, but opted not to take any more action in July.

Many economists had predicted further reductions, which would have helped out business and home loans customers, but these were not forthcoming.

Members of the board said the Australian economy had started to gather more momentum and this meant that rate cuts were not necessary.

The minutes stated: "Members continued to view it as appropriate for interest rates to be a little below average given evidence of slower global growth and the low rate of inflation in Australia."

Although the minutes didn't explicitly say how the RBA may act in August and September, economist at ANZ Craig Michaels believes the bank is currently in a "wait and see mode".

"Barring calamitous developments in Europe, the RBA appears likely to leave interest rates on hold for at least the next couple of months as it assesses the impact of earlier policy-easing on the domestic economy," he commented.

The revelations have had an impact on the strength of the Aussie dollar, which has risen against the US equivalent.

However, the news is a blow to mortgage customers, as recent rate cuts had given them some extra breathing space.

According to representatives at the Commonwealth Bank, a lot of customers have taken advantage of the lower rates in order to repay their home loans far quicker, National Features reports.

Some banks did not pass on the lower rates in their entirety anyway, with bosses citing higher lending costs for keeping some of the savings back and this unsurprisingly angered a lot of people.

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