The Reserve Bank Australia (RBA) meets on the first Tuesday of each month (except January) to decide on the official cash rate target – the rate offered on overnight loans to commercial banks. It can decide to keep the rate the same, raise it, or decrease it. Banks don’t have to follow the moves the RBA makes, but many will adjust their rates after a change.
Predicting the decision of the RBA is very difficult, a recent poll of leading Australian economic commentators and fund managers highlights this point. Asked about the direction and timing of the next RBA change views differ greatly:
Many factors impact the decision to increase rates but independent of the RBA we have recently seen banks increase their lending rates which has a direct impact on their customers.
Overall the experts are mostly suggesting an increase to rates (in 2017 or 2018 and beyond), with that in mind and with many people holding large levels of debts it is important to:
If you would like your lending reviewed or help in consolidating existing loan(s) please contact Acuity Advisers on Enquiries@AcuityAdvisers.com.au or phone 08 9322 1481.