Despite a raft of less than impressive economic data, the Reserve Bank of Australia (RBA) 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 three per cent.
Research director at RP Data Tim Lawless felt the decision was based on the RBA waiting for the previous October cut to flow through.
“Clearly some of the more positive data flows that have arrived lately have caused the RBA to wait and see how the economy is responding the current cash rate setting. From a housing market perspective, I would have to assume the RBA is reasonably comfortable with the current performance of the market.
“Dwelling values are 2.1 per cent higher than what they were at the end of May this year and there has been a modest uptick in transaction volumes which, suggests that consumers are slowly responding to the previous rate cuts.
“The twenty five basis point rate cut in October is still working its way through the data, so I am sure the RBA will be watching how values pan out in November based on the RP Data-Rismark daily index, which is already showing a small improvement in dwelling values since the start of the month.”