The Reserve Bank of Australia (RBA) has decided Australia's interest rates will remain on hold at the record-low level of 0.25% as the nation works to recover from the economic damage caused by COVID-19. RBA Governor Philip Lowe stated “many people have lost their jobs and there has been a sharp rise in unemployment.” However, he went on to say “leading indicators have generally picked up recently, suggesting the worst of the global economic contraction has now passed.”
Dr Lowe also noted;
- "The outlook remains uncertain and the recovery is expected to be bumpy and will depend upon containment of the coronavirus."
- "Over the past month, infection rates have declined in many countries, but they are still very high and rising in others."
The decrease in interest rates has seen record months for mortgages as lending institutions try to outdo each other to offer the lowest rate home loan possible. Sally Tindall, Research Director at RateCity.com.au, notes that mortgage rates could continue to fall regardless of direction taken by the Reserve Bank. For savers, she believes that “we’re unlikely to see any real turnaround in savings rates for months, or likely years to come”.
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The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.