RBA meeting November 2011: Rates Cut by 0.25% to 4.50%

The Reserve Bank of Australia (RBA) has cut official interest rates by 25 basis points to 4.50 per cent at its board meeting on November 1, 2011. It was the first interest rate cut by RBA in two and a half years.

RBA decision to cut official cash rate met the expectation of financial markets:

  • Global financial markets have recovered somewhat from the turmoil of recent months.
  • Australia's terms of trade have now peaked and will decline somewhat in the near term, but they remain very high.
  • Recent information is consistent with a moderation in the pace of global growth.
  • Subdued demand conditions and the high exchange rate have contained inflation more recently.
  • The unemployment rate has increased a little over recent months and it remains close to 5 per cent.
  • Financial conditions have been easing somewhat recently, with market interest rates declining a little and competition to lend increasing.
  • The exchange rate has been very variable over the past few months, but on the whole has remained at historically high levels.

Over the past year, the Board has maintained a mildly restrictive stance of monetary policy, in view of its concerns about inflation. With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the Board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2-3 per cent inflation over time.

Westpac, Commonwealth Bank and ANZ have all followed with 25-basis-point cuts to their Standard Variable Rates and NAB cut its Standard Variable Rate only by 20 basis points. Still NAB has the lowest Standard Variable Rate among Big Four at 7.47%. However best mortgage rates are always NOT with Big Four. So please fill out the form on this page and make sure you don't miss on the best Home Loan deal following this RBA decision...

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Published on November 11-st, 2011 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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