RBA's Record Low Rate to Hit One-year Mark
THE Reserve Bank's interest rate is set to notch up a year at record low levels, and is tipped to stay that way heading into 2015.
THE central bank board held the cash rate steady at 2.5 per cent for the 11th consecutive month at its meeting on Tuesday.
While homeowners rejoiced, the Australian dollar hit a near three-month high of 94.51 US cents immediately after the decision was announced.
The RBA last changed the rate in August 2013, cutting it by a quarter of a percentage point.
After the July meeting governor Glenn Stevens stuck by the stance he has held since the start of the year "the most prudent course is likely to be a period of stability in interest rates." He believes the low cash rate is helping support economic growth.
Housing Industry Association senior economist Shane Garrett said low interest rates had helped fuel growth in the housing sector, which is tipped to take over from mining investmentas the main driver of economic growth.
And with the RBA seemingly in no rush to make any changes, economists expect the cash rate will remain on hold for a 12th month when its board next meets on August 5.
By Jason Cadden and Belinda Merhab
- From: AAP
- July 01, 20144:47PM