The Reserve Bank of Australia lowered its cash rate by 25 bps to a new record low of 1.0 percent at its July meeting, as widely expected. It is the first back-to-back cut in borrowing cost since 2012, aiming to support employment growth and to provide greater confidence that inflation will be consistent with the medium-term target. The Committee said they will continue to monitor developments in the labour market and adjust monetary policy if necessary. Interest Rate in Australia averaged 4.39 percent from 1990 until 2019, reaching an all time high of 17.50 percent in January of 1990 and a record low of 1 percent in July of 2019.

Interest Rate in Australia is expected to be 1.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Australia to stand at 0.75 in 12 months time. In the long-term, the Australia Interest Rate is projected to trend around 1.25 percent in 2020, according to our econometric models.

Australia Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-04-02 03:30 AM RBA Interest Rate Decision 1.5% 1.5% 1.5% 1.5%
2019-05-07 04:30 AM RBA Interest Rate Decision 1.5% 1.5% 1.5% 1.5%
2019-06-04 04:30 AM RBA Interest Rate Decision 1.25% 1.5% 1.25% 1.25%
2019-07-02 04:30 AM RBA Interest Rate Decision 1.0% 1.25% 1% 1%
2019-07-22 10:30 PM RBA Kent Speech
2019-07-25 03:05 AM RBA Gov Lowe Speech
2019-08-06 04:30 AM RBA Interest Rate Decision 1%



RBA Cuts Cash Rate Again to Fresh Record Low of 1%

The Reserve Bank of Australia lowered its cash rate by 25 bps to a new record low of 1.0 percent at its July meeting, as widely expected. It is the first back-to-back cut in borrowing cost since 2012, aiming to support employment growth and to provide greater confidence that inflation will be consistent with the medium-term target. The Committee said they will continue to monitor developments in the labour market and adjust monetary policy if necessary.

Excerpt from the statement by the governor, Philip Lowe: 

The outlook for the global economy remains reasonable. However, the uncertainty generated by the trade and technology disputes is affecting investment and means that the risks to the global economy are tilted to the downside. In most advanced economies, inflation remains subdued, unemployment rates are low and wages growth has picked up. The slowdown in global trade has contributed to slower growth in Asia. In China, the authorities have taken steps to support the economy, while continuing to address risks in the financial system.

Global financial conditions remain accommodative. The persistent downside risks to the global economy combined with subdued inflation have led to expectations of easing of monetary policy by the major central banks. Long-term government bond yields have declined further and are at record lows in a number of countries, including Australia. Bank funding costs in Australia have also declined, with money-market spreads having fully reversed the increases that took place last year. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the low end of its narrow range of recent times.

Over the year to the March quarter, the Australian economy grew at a below-trend 1.8 percent. Consumption growth has been subdued, weighed down by a protracted period of low income growth and declining housing prices. Increased investment in infrastructure is providing an offset and a pick-up in activity in the resources sector is expected, partly in response to an increase in the prices of Australia's exports. The central scenario for the Australian economy remains reasonable, with growth around trend expected. The main domestic uncertainty continues to be the outlook for consumption, although a pick-up in growth in household disposable income is expected to support spending.

Employment growth has continued to be strong. Labour force participation is at a record level, the vacancy rate remains high and there are reports of skills shortages in some areas. There has, however, been little inroad into the spare capacity in the labour market recently, with the unemployment rate having risen slightly to 5.2 percent. The strong employment growth over the past year or so has led to a pick-up in wages growth in the private sector, although overall wages growth remains low. A further gradual lift in wages growth is still expected and this would be a welcome development. Taken together, these labour market outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued across much of the economy. Inflation is still, however, anticipated to pick up, and will be boosted in the June quarter by increases in petrol prices. The central scenario remains for underlying inflation to be around 2 percent in 2020 and a little higher after that.

Conditions in most housing markets remain soft, although there are some tentative signs that prices are now stabilising in Sydney and Melbourne. Growth in housing credit has also stabilised recently. Demand for credit by investors continues to be subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

Today's decision to lower the cash rate will help make further inroads into the spare capacity in the economy. It will assist with faster progress in reducing unemployment and achieve more assured progress towards the inflation target.


RBA l Rida Husna | rida@tradingeconomics.com
7/2/2019 5:09:38 AM



Australia Money Last Previous Highest Lowest Unit
Interest Rate 1.00 1.25 17.50 1.00 percent [+]
Money Supply M0 111.97 112.58 114.54 4.09 AUD Billion [+]
Money Supply M1 356.18 359.46 359.46 8.25 AUD Billion [+]
Interbank Rate 1.25 1.40 18.18 1.25 percent [+]
Money Supply M3 2155.10 2153.52 2155.10 10.19 AUD Billion [+]
Foreign Exchange Reserves 77470.00 79919.00 88457.00 1126.00 AUD Million [+]
Banks Balance Sheet 4404.79 4340.40 4404.79 322.97 AUD Billion [+]
Central Bank Balance Sheet 168830.00 174276.00 202663.00 30418.00 AUD Million [+]
Loans to Private Sector 956.26 962.11 962.11 20.21 AUD Billion [+]
Deposit Interest Rate 1.75 1.85 17.25 1.75 percent [+]
Private Debt to GDP 205.30 205.30 209.60 120.50 percent [+]


Australia Interest Rate

In Australia, interest rates decisions are taken by the Reserve Bank of Australia's Board. The official interest rate is the cash rate. The cash rate is the rate charged on overnight loans between financial intermediaries, is determined in the money market as a result of the interaction of demand for and supply of overnight funds. This page provides - Australia Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Australia Interest Rate - actual data, historical chart and calendar of releases - was last updated on July of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.00 1.25 17.50 1.00 1990 - 2019 percent Daily




Country Last Previous
Argentina 58.72 Jul/19
Turkey 24.00 Jun/19
Mexico 8.25 Jul/19
Russia 7.50 Jun/19
Brazil 6.50 Jun/19
South Africa 6.50 Jul/19
India 5.75 Jul/19
Indonesia 5.75 Jul/19
China 4.35 Jun/19
Saudi Arabia 3.00 Jun/19
United States 2.50 Jun/19
Canada 1.75 Jul/19
Singapore 1.67 Jun/19
South Korea 1.50 Jul/19
Australia 1.00 Jul/19
United Kingdom 0.75 Jun/19
Euro Area 0.00 Jun/19
France 0.00 Jun/19
Germany 0.00 Jun/19
Italy 0.00 Jun/19
Netherlands 0.00 Jun/19
Spain 0.00 Jun/19
Japan -0.10 Jun/19
Switzerland -0.75 Jun/19


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