2016 11 Interest Rates

RBA keeps interest rates stable, Westpac increases interest rates

The Reserve Bank of Australia (RBA) left interest rates unchanged at 1.5% at its November monetary policy meeting, a decision that was widely expected by financial markets and the vast majority of economists.

In the final paragraph of the statement, the board offered no explicit easing bias signalling that another near-term rate cut was likely, simply acknowledging that “taking account of the available information, and having eased monetary policy at its May and August meetings, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time”.

Adding to signs that the board is comfortable with monetary policy right now, it added in a paragraph on its inflation and growth forecasts, stating that “the Bank’s forecasts for output growth and inflation are little changed from those of three months ago”.

Westpac, ING and National Australia Bank’s online division are raising fixed and variable home loan interest rates by up to 60 basis points.

Westpac, ING and National Australia Bank’s online division are increasing fixed and variable home loans by up to 60 basis points as more lenders struggle with volatile capital markets, tougher underwriting standards, tighter rules and likelihood of rate rises.

Westpac is increasing rates for both owner occupier and investors over two to five years by between 24 basis points and 60 basis points and NAB’s UBank is increasing standard variable rates for owner-occuper, investor and principal and interest by 10 basis points.

The changes also apply to Westpac’s subsidiary St George bank, and separate increases also apply to RAMS, another subsidiary of Westpac, Fairfax Media reports. ING and Teachers’ Mutual Bank are also reported to be increasing fixed rates for local property buyers.

For more information about the RBA interest rate decision, read this article by Business Insider

For more information about Westpac and their subsidiaries increasing interest rates, read this article from the Australian Financial Review.