The Reserve Bank of Australia (RBA) made the decision to hold the official cash rate at 4.10% in light of the data released last week, showing that inflation had eased; now down to 5.6%.
Dr Philip Lowe, Governor of the RBA again made mention in his statement, that while Australia’s inflation has passed its peak, further tightening will keep occurring until targets are met in a “reasonable timeframe”.
“High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality,” explained Dr Lowe.
Holding the official cash rate this month will allow time for the Board to better assess the state of the economic outlook and accompanying risks. However, Dr Lowe warned that “the Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
The coming months expect to see large numbers of Australian borrowers rolling off their record-low fixed-rate mortgages, taken out in 2020. Homeowners could face an increase in repayments by up to 65%. Fortunately, with proper preparation, mortgages holders can effectively navigate the upcoming fixed interest rate cliff with the help of a mortgage or finance professional.