05 December 2024
At the November meeting, the Reserve Bank of Australia (RBA) Board resolved to maintain the cash rate at 4.35%.
In the accompanying media release, the Board once again expressed that they consider that underlying inflation remains too high.
The RBA advised that whilst inflation is easing due to weak growth and restrictive financial conditions, uncertainties persist around consumer spending and the labour market. Whilst most central banks have eased their monetary policy, the international outlook also remains uncertain. Importantly, the impact of China implementing expansionary fiscal policies is yet to be seen.
The RBA has reaffirmed that their priority is to sustainably return inflation to the 2%-3% target range. At this stage, it seems unlikely that there will be any change in the cash rate arising from the upcoming December meeting.
This will place all eyes on the 17-18 February 2025 meeting as the next potential juncture for a rate adjustment.
In a related development, the Reserve Bank Amendment (Enhancing Independence and Accountability) Bill 2023 has passed both houses of Parliament on 29 November and has received royal assent.
This bill establishes two distinct RBA boards:
- Monetary Policy Board: Dedicated to interest rate decisions.
- Governance Board: Focused on the broader management and governance of the RBA.
This reform aims to reinforce the independence of the RBA and to strengthen decision making, accountability and transparency in monetary policy decisions and the RBA’s corporate governance.
The new Board structure is anticipated to come into effect from 1 March 2025.
At the coalface, we see the significant financial impact arising from the RBAs current interest rate policy and can’t emphasise enough the importance of shopping around to ensure that you are getting the best rate possible.
If you are concerned about the interest rate you are paying and would like a no-cost, no obligation loan health check, please get in touch.
Sky Accountants Ballarat
Phone: 03 5332 8855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 5428 1400
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437
Sky Accountants Kilmore
Phone: 03 5782 2299
Office Address: 74B Sydney Street, Kilmore, Victoria 3764, Australia
Postal Address: PO Box 190 Kilmore Victoria 3764