At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.00 per cent.
The 25-basis point cut follows last month’s decision to finally change rates for the first time since August 2016.
Today’s cut by the RBA had been anticipated by markets as the nation’s 25-plus years of solid economic growth appear to be coming to a close.
While the RBA was tipped to cut rates again soon, today’s cut has surprised realestate.com.au Chief Economist, Nerida Conisbee.
“With unemployment holding steady in May and the positive flow-on effect of June’s cut likely to take some time, it was surprising that the RBA decided to cut this month.
“It is likely the move was pre-emptive given economic conditions deteriorating overseas and no end in sight to trade issues originating out of the US. It is possible we will see another cut in August,” she says.
And with major lenders looking to win back customers in the wake of the Hayne Royal Commissionand the Australian Prudential Regulatory Authority’s proposal to relax lending standards, today’s move by the RBA is good for home owners who should see their monthly mortgage repayments drop.
With another cut expected before Christmas, this means mortgage holders will have more cash in their pockets by the year’s end.