RBA interest rate decision The RBA decided to raise the cash rate by another 0.25%, bringing the cash rate to 3.6%, but Reserve Bank governor Philip Lowe’s language shifted on the number of future hikes.
This means another $77 will be added to monthly repayments on a $500,000 loan, according to RateCity, with a whopping $983 a month extra piled on since the first rate rise in May 2022 — or a 42 per cent increase.
Meanwhile a $1 million loan, which is the median house price in Australia, will have $156 added to monthly mortgage repayments
RBA cash rate March 2023. The Reserve Bank of Australia (RBA) sets the official interest rates for the Australian economy, which can have a significant impact on various aspects of the economy, including:
- Consumer spending: Changes in interest rates can impact the borrowing costs for consumers, affecting their willingness to spend. When interest rates are low, consumers may be more likely to borrow money for purchases like houses, cars, or other investments. This can stimulate economic growth and increase consumer spending.
- Business investment: Similarly, changes in interest rates can affect the cost of borrowing for businesses, which may impact their willingness to invest in new projects or expand their operations. Lower interest rates may make it easier for businesses to access credit and invest in growth.
- Currency exchange rates: Interest rate changes can also affect the exchange rate of the Australian dollar relative to other currencies. If the RBA raises interest rates, it can make the Australian dollar more attractive to foreign investors, leading to an appreciation in its value.
- Inflation: One of the primary goals of the RBA is to keep inflation within a target range of 2-3%. Interest rates can impact inflation by affecting the demand for goods and services. If interest rates are low, it can stimulate demand and potentially increase inflation. Conversely, if interest rates are high, it can slow down demand and potentially lower inflation.
Overall, the RBA’s interest rate decisions are an important tool for managing the Australian economy and achieving its policy objectives. By adjusting interest rates, the RBA can influence the behavior of consumers and businesses, impact currency exchange rates, and manage inflation levels.