Amid speculation of a fall in the official cash rate, the Reserve Bank of Australia has announced the decision of its monthly meeting.
The Reserve Bank made the decision to cut the official cash rate by 25 basis points to 1.50 per cent, as predicted by 56 per cent of commentators and economists surveyed by finder.com.au.
ABC Bullion chief economist Jordan Eliseo said the cut is indicative of the RBA’s intention to “arrest the decline in inflationary pressure which is widespread across the economy”.
AMP Capital chief economist Shane Oliver, who also predicted a cut, said while the June quarter inflation data was not low enough to make a rate cut certain, the RBA is now making moves to help ensure inflation expectations do not become entrenched below 2 per cent.
Mr Oliver said the RBA wants to “ensure there is reasonable confidence that inflation will move back into the target zone in a reasonable time frame and to head off a rebound in the Australian dollar”.
CoreLogic head of research Tim Lawless agreed that low inflation and the strength of the Australian dollar were key reasons for the cut, but said a slowdown in dwelling value growth also made it easier for the RBA to cut the cash rate.
“CoreLogic’s hedonic home value index reported a 6.1 per cent annual rise in capital city dwelling values over the year ending July, which is the lowest rate of annual growth since September 2013 and substantially lower than a year ago when dwelling values were rising at almost double the pace,” Mr Lawless said.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 23 Aug 2017'No apparent benefit' in ATO position on ECPIBy Katarina Taurian
- 23 Aug 2017Transfer balance cap confusion posing risks for practitionersBy Miranda Brownlee
- 23 Aug 2017TBAR reporting tipped to expose illegal adviceBy Miranda Brownlee
- 22 Aug 2017Contentious views on segregation locked inBy Katarina Taurian
- 22 Aug 2017Contributions spike for 2016-17 financial yearBy Staff Reporter
- 22 Aug 2017ATO targeting illegal retirement schemesBy Staff Reporter
- view all
- Transfer balance cap confusion posing risks for practitioners
Confusion around certain aspects of the transfer balance cap could be leading some practitioners to provide advice to clients based on premi...read more
- view all