6PM NEWS
6:48pm July 7, 2015
Reserve Bank leaves interest rates on hold with predictions it may halve within a year
July 07, 2015: Australia's record-low interest rates remain on hold with the Reserve Bank today leaving the official cash rate unchanged.
9NEWS
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The Reserve Bank of Australia has left interest rates steady at the record low of two percent following its July board meeting, with predictions the cash rate could be cut in half within a year.
The RBA today decided not to reduce the official cash rate by 0.25 percent, confirming recent wide-spread speculation.
Today, ANZ economists said they expected the Reserve Bank to keep interest rates on hold amid ongoing uncertainty offshore and patchy domestic economic data.
Investment banker and Melbourne radio host Tom Elliott believes further rates could be dramatic.
"It would not surprise me at all to see official rates cut from two percent where they are now, down to one percent sometime in the next 12 to 18 months.
The Reserve Bank of Australia is set to leave interest rates on hold. (AAP)
According to Rate City, the average standard variable rate is 4.83 percent.
On a loan of $500,000, the monthly repayments for mortgage holders is more than $2600. If rates were to drop a whole percentage point, the average homeowner could be better off by up to $300 a month.
Westpac Chief Economist Bill Evans said he believes any further cut won't happen until at least November and only if economic growth remains low.
Mr Evans said that while the Australian dollar has slid below 75 cents, it would like to see it fall closer to 70 cents in order to boost growth.
"If lower commodity prices and with all the uncertainty around the world at the moment a lower dollar is needed for the Australian economy ... and I believe will be achieved - we have a target of around 72 cents by the end of the year," he said.
Real Estate Institute of NSW president Malcolm Gunning said the move was expected, and any potential rise in rates should not worry homeowners.
"There has been lots of speculation and concerns around a property bubble if interest rates rise in the future," he said.
"However, we believe that there is no property bubble in Sydney.
"Those who are still concerned should remember that property should be a long term investment which makes you immune to cycles."
The official cash rate has fallen 275 basis points, or 2.75 percent, since November 2011.
The RBA will meet again on Tuesday August 4.
© ninemsn 2015
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