RBA's August decision: rates on hold at 3.50%, again.

For the second month in a row, the Reserve Bank of Australia has announced that it will hold the official cash rate at 3.50%, in reaction to low domestic inflation figures and the continued relative stability of the economy.

In a statement, Governor Glenn Stevens asserted, "the stance of monetary policy remained appropriate, as the past month has seen inflation meeting targets and the international economic climate has been relatively subdued."

No change again? Why so boring, RBA?

Hey now, don’t be like that. Although this month's decision doesn't make for very interesting news, it's a positive sign for the country overall.

The RBA's most recent decisions have resulted in some pretty good stuff:

• The cumulative 0.75% cuts in May and June produced a growth in GDP and contributed to a substantial drop in unemployment figures.
• Holding rates in July helped keep inflation down; it's currently running at 1.5%, the lowest it has been in three years.

So it's really no surprise that the RBA is being wholly unadventurous and leaving rates well alone this month. They’re sitting back and monitoring the effects of their previous decisions--it ain't broke, so they ain't fixing.

Any predictions for the next few months, oh wise one?

Glad you asked. Here at Mozo, we’re predicting that nothing short of an international monetary meltdown will prompt another rate cut in the next couple of months. But the odds for another rate cut before Christmas is still highly likely, particularly if more EuroZone-related issues surface in the coming months.

So what does all this mean for borrowers?

While the RBA isn't instituting a whole lotta change this month, that doesn't mean you can't!

It's unlikely that banks will make cuts to any of their variable rate home loans but we've seen some great downward movements in fixed rate home loans. You can snap up a fixed rate as low as 5.44% for one, two or even three years with market-leading My Mortgage Freedom.

As always, the team of Mozo Rate Chasers will be keeping an eye on things, ensuring any sneaky rate changes don’t go unnoticed.

If you're wondering how much you could save by switching home loans, give your home loan a free home loan health check. In seconds, we’ll tell you how much you can save by switching loans.

And savers?

Although savings interest rates are on the whole quite steady, there are still a few banks out there competing fiercely for your money. So, if you've got any cash stuffed under the mattress, now is the perfect time to invest it in a high-interest account.

Some top offers include:
RAMS Saver: 5.75% (monthly deposit and withdrawal conditions apply)
UBank USaver: 5.71% (monthly deposit conditions)
Citibank Online Saver: 5.70% (4 month bonus rate)

Term deposits are also looking pretty tantalising right now with over 18 banks offering rates of over 5% on a $10,000 deposit (5 year). RaboDirect tops them all, with a juicy 5.80%. Other popular choices include Gateway CU at 5.21% and BankWest with 5.15%.