RBA cuts cash rate to record low amid coronavirus concerns
The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new record low of 0.50% as the coronavirus outbreak impacts global financial markets.
RBA Governor Philip Lowe said the coronavirus has clouded the near-term outlook for the global economy and global growth in the first half of 2020 will be lower than earlier expected.
“Prior to the outbreak, there were signs that the slowdown in the global economy that started in 2018 was coming to an end,” Governor Lowe said in a statement.
“It is too early to tell how persistent the effects of the coronavirus will be and at what point the global economy will return to an improving path.”
The RBA previously cut the official cash rate to 0.75% in October, which was the third interest rate cut in 2019.
More rate cuts on the way?
Governor Lowe also hinted that more rate cuts could be on the way in coming months, saying the RBA will continue to monitor developments closely and assess the implications of the coronavirus for the economy.
“The Board is prepared to ease monetary policy further to support the Australian economy,” Governor Lowe said. The RBA still has a little fuel in the tank to support the economy yet!
Despite weakness in some economic indicators, in particular retail and obviously travel industries doing it tough, there are still some parts of the economy ticking along – the housing market in particular.
Today’s rate cut may now stimulate property market activity further, particularly for investors looking for stock market alternatives given the recent falls in the ASX200.
Want to know what this rate cut means for your home loan?
With this being the fourth RBA cash rate cut since June 2019, it can get a bit confusing as to just how much of these cuts your lender is passing on to you. We’ve been around the block long enough to know not all lenders will pass on the cut in full, and exactly how much they will pass on will differ from lender to lender.
The good news is we’re following the market closely and can tell you which lenders pass this fourth rate cut on to their customers in full, and which lenders don’t.
We can’t abolish coronavirus, but we can definitely make sure you save time and money by securing you the best interest rate in the current marketplace.
So if you’d like to find out more, then please get in touch – we’d be happy to help break it down for you.
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