Newsletters & Bulletins

RCR Finance Bulletin # 23 - Tuesday, 3rd March 2009

RBA Leave Interest Rates Unchanged

At its meeting today, the Board of Reserve Bank of Australia (RBA) decided to leave the cash rate unchanged at 3.25%.

Conditions in global credit markets have improved since November, but sentiment remains fragile. Share prices have weakened and banking systems in several major countries are still under pressure, as authorities work towards a resolution of the balance-sheet problems. Significant macroeconomic policy stimulus is being put in place around the world, but it is too soon to see the effects of those measures.

In Australia, demand has not weakened as much as in other countries and, on the basis of currently available information, the Australian economy has not experienced the sort of large contraction seen elsewhere. The Australian financial system remains strong and the monetary policy transmission process is working to deliver large reductions in interest rates to end borrowers. Nonetheless, economic conditions are clearly weak, and given the speed and scale of the global economic deterioration and its effect on confidence, weak conditions are likely to continue in the near term. Inflation is likely to decline over time.

In response to that outlook, there has already been a major change in both monetary and fiscal policy. Market and mortgage rates are at very low levels by historical standards and business loan rates are below recent averages, reducing debt-servicing burdens considerably. Together with the substantial fiscal initiatives, the cumulative decline in interest rates will provide significant support to domestic demand over the period ahead. On this basis, notwithstanding evident economic weakness at present, the Board judged that the stance of monetary policy was appropriate for the moment. The Board will consider the position again at its next meeting.

Now is a great time to contact us to see how we can assist you, your friends and family with your finances. Even if you have an existing loan in place, it is always a great idea to have a regular finance health check with us to ensure you are still in the best loan possible.

We look forward to hearing from you, simply reply to this email with your interest or call the office today on 03 9726 2000.

DISCLAIMER...The information contained within this Newsletter / Bulletin is of a general nature only and is not intended to be relied upon or to be construed as the giving of professional financial, legal or economic advice. RCR Finance Pty Ltd makes no warranties or representations whatsoever regarding the quality, accuracy, or otherwise of any material contained within this Newsletter / Bulletin. RCR Finance Pty Ltd will not be held liable to readers or users of the material contained within this Newsletter / Bulletin for any loss or damage however caused resulting from the use of the material. All readers or users are advised to seek their own independent professional financial, legal or economic advice.