At today’s meeting the Reserve Bank of Australia (RBA) cited the rocky markets overseas and came good on the “expected” interest rate drop. 0.25% should shave about $50 per month off the average $300,000 mortgage. What sort of rates will the banks pass on and what impact does it have on you? Comments welcome.
Governed Glenn Stevens’ media release points to European economic concerns, and rising costs of finance for our banks. Amongst other things this lead to a “more accommodative stance of monetary policy”. What do our depositors think?
View the RBA release here
I am going to introduce market commentary, both personal and from fund managers and economists, to provide an area for your to access some of the key points we see every day. To open we have this interview with Anton Tagliaferro, Investment Director at IML (Investors Mutual Limited).
Mr Tagliaferro addresses some common questions from investors, and the current market volatility.
RDG: Good news for mortgage holders: RBA drops 0.25%. I imagine every mortgage holder will be watching the banks to see what they pass on.
Key points from today’s release include:
- China has been slowing (RDG: although still kicking our…)
- European sovereign debt crisis has knocked everyone around
- Aussie dollar is still high
- Short-term rates (term deposits etc) have dropped, but credit is still tough for the banks, people are not borrowing
The RBA is aiming to ease into “idle” mode. Interest rates are coming back to longer term averages, term deposits are coming down which I expect will gradual lead people back into investments (which is a good thing).
STATEMENT BY GLENN STEVENS, GOVERNOR: MONETARY POLICY DECISION
At its meeting today, the Board decided to lower the cash rate by 25 basis points to 4.25 per cent, effective 7 December 2011.
Continue reading RBA drops cash rate to 4.25%