The Reserve Bank of Australia (RBA) is likely to return to the sidelines and leave official interest rates on hold this month, according to a survey by leading mortgage broker Priority Lending
Priority Lending Corporate Spokesman Paul Smith said a survey of the company’s mortgage brokers found 55 per cent expect the RBA to keep the cash rate at 3.75 per cent at tomorrow’s monthly board meeting.
Mr Smith said 38 per cent of the 206 broker respondents thought the central bank could said lower rates by 25 basis points while seven per cent tipped a second consecutive 50 basis points reduction. No one expects a cut of one per cent or higher.
“While another rate reduction by the RBA would be welcomed by consumers and the struggling retail sector, the majority of our brokers believe the central bank will reapply its wait and see approach,” he said.
“They will probably further assess the impact of last month’s reduction and examine other domestic economic factors.”
“The debt crisis in European isn’t going away and there’s also some concern about the slowdown in the Chinese economy.”
“At least the RBA has plenty of fuel in the tank should it see the need down the track for more rate relief.”
Mr Smith said the good news for consumers was that there was no sign of interest rates going up and it was wise for borrowers to try and take advantage of the interest rate stability by increasing their home loan repayments.
Survey Results:
What movement do you expect from the RBA on June 5?
a) No movement 55%
b) Decrease 25 bps 38%
c) Decrease 50 bps 7%
d) Decrease 100 bps or more 0%
Source: Priority Lending
