RBA meeting December 2010: Rates Unchanged at 4.75%

As expected, the Reserve Bank of Australia (RBA) has left official interest rates unchanged at 4.75 per cent at its board meeting on December 7, 2010.

This RBA decision provided a relief for borrowers and retailers in the crucial shopping weeks before Christmas.

The central bank decided to keep rates steady after a string of weaker economic figures in recent weeks:

  • Australian economy expanded by a disappointing 0.2 per cent in the third quarter, and
  • retail sales dropped 1.1 per cent in October.

Other factors that influenced RBA decision to leave interest rates on hold:

  • uncertainty in Europe,
  • all the major banks raised their home loan rates more than RBA,
  • job market is strengthening in Australia and unemployment is tipped to drop 0.2 per cent to 5.2%,
  • strong Aussie dollar will assist in containing pressure on inflation over the period ahead.

The next RBA meeting is scheduled on the 1st of February 2011, so any move on official interest rates is unlikely to come before February, however banks can move rates independently.

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Published on December 12-th, 2010 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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