Rates on hold

Despite a raft of less than impressive economic data, the Reserve Bank of Australia has decided to keep the official cash rate on hold.

At its monthly Board meeting earlier today, the RBA decided it was prudent to keep the cash rate at 3.25 per cent – slightly above the historic low of 3 per cent.
The RBA has already lowered the cash rate a full percentage point this year and so the current circumstances are entirely different to what we faced in 2009. Official rates were reduced in October and the central bank is still waiting to see how that rate cut and those made earlier in the year play out. This obvioulsy is not great for the small business owner which are all hurting with slow cashflows.
The RBA could still lower rates in December but it may continue to keep a watching brief over Christmas. It can be a good strategy to wait and see what impact the lower rates have over the festive season and we expect to see some sectors enjoy increased activity.



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