Reserve pegs rate back again
The Reserve Bank has knocked another sizable chunk off the base rate at its monthly meeting, taking it to 4.25 per cent.
In a move that could pave the way for a flood of low-interest home loans, the Bank decided to lop 100 basis points off the base rate, which comes into effect today (December 3rd).
The Bank’s governor Glenn Stevens said that while Australia has proven more resilient than some other nations, stats indicate that there is still risk of a sharp slowdown in consumer spending.
“Weighing up the international and domestic developments of recent months, the board judged that a further significant reduction in the cash rate was warranted now,” he said.
This is the fourth straight month that the Reserve has decided to cut rates and the move takes it to the lowest level seen since 2001, when it also stood at 4.25 per cent.
In addition to new low-interest home loans, the move could lead to a flurry of new cheap credit card and personal loan deals as the new year gets underway.