news

RBA urged to rethink cash rate decisions

 

The Reserve Bank of Australia (RBA) should consider following Europe’s lead in placing longer intervals between monetary policy meetings throughout the year, according to the CEO of a leading real estate group.

At a recent meeting held by the Governing Council of the European Central Bank (ECB), it was announced its monetary policy meetings would now take place every six weeks from January 2015.

According to Raine & Horne chairman and chief executive, Angus Raine, Australia’s central bank should consider following Europe's lead.

“It’s a sensible move to have longer intervals between monetary policy meetings, and President Mario Draghi has indicated the ECB won’t make another decision on interest rates until last month’s judgement to drop some of its interest rates into negative territory has time to flush through the European economy,” he said.

“In the past, we’ve found decisions made by the RBA tend to take a few months to work their way through to consumer confidence, business activity and ultimately the real estate market, yet the RBA can make a change to monetary policy every month."

His comments follow the RBA announcement last week that interest rates are to stay at a record-low of 2.5 per cent.

Mr Raine said he has seen how the lead-up to an RBA board meeting can cause “hype and speculation” and leaves buyers and sellers holding their breath before and after the outcome is announced.

“To be fair, the impact of the monthly meetings is not as emphatic in a bull run as we’ve enjoyed over the past two years, but I’m more concerned about the effect when the RBA starts tightening monetary policy with a series of hikes, which is expected to begin later this year or early next,” he said.

“Longer intervals between meetings could give the RBA more time for its decisions to work their magic and minimise the impact the meetings have on business and investment activity.”

RBA urged to rethink cash rate decisions
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%