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Official rates stable, but potential bank-originated hikes loom
The meeting’s minutes, released today, show that the RBA was quite comfortable with its current stance on monetary policy.
The official cash rate was left on hold at 4.5 per cent on August 3, where it has held steady since May.
Interest rates on loans to households and businesses had returned to around average levels in May and developments over June and July had not materially changed the board’s assessment, the RBA minutes said.
Conditions in the international economy remained uncertain, the board added, even more so than earlier in the year.
Despite these promising signs from the central bank, some of the talk around town is that the big banks are poised to deliver increases to their interest rates as soon as Saturday’s federal election is done and dusted, as rising funding costs put pressure on their margins.
If this is the case borrowers could see a hike to their interest repayments as early as next week.