March interest rate market update

The Reserve Bank of Australia (RBA) has announced that they’re leaving interest rates on hold at 2% for the tenth month in a row. This decision was widely expected as all economic data points

towards a stable economy that isn’t need of either stimulus or slowing down. The RBA has commented that if data shows a slowdown over the coming months, they have the capacity for rate cuts. However for now, they believe things are stable. Accordingly, we expect that most banks will leave their rates on hold for now, however competition in the discounted rate market remains high.

The below graph shows the trend and differences between the bank’s advertised interest rates, the actual rate paid by borrowers and the RBA cash rate.