RBA interest rate cut 'curious'

Mozo

Tuesday 07 April 2009

The Reserve Bank of Australia’s (RBA) interest rate cut of 25 basis points is rather a curious decision that suggests it is trying to compromise between staying put and keeping homeowners happy.

Such is the claim of the Herald Sun’s money expert Terry McCrann, who has taken the decision as a sign that the RBA is still keen to show homeowners that it wants to help them out, but is also hoping that it’s past interest rate cuts may have done enough to keep the Australian economy on an even keel.

He went on to state that despite the urge to help homeowners, such a small cut does in fact make it quite difficult for banks to pass it on with new low-interest home loans.

He warned that the impact on the housing market is likely to be "irrelevant".

For those looking to compare savings accounts, the RBA’s cut may have been met with some dismay as it is possible that the number of high-interest savings accounts on the market is likely to shrink further.

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