The Reserve Bank of Australia has decided to leave the official cash rate unchanged at 1.5%

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Posted on May 08, 2019

In the lead up to the federal election the RBA has again decided to leave the official cash rate unchanged at 1.5%. I'd like to share some thoughts on why it has made this decision.

Only twice before has the RBA elected to drop rates during an election campaign and on both those occasions the incumbent governing party lost the election. Despite inflation falling below its target range of 2-3%, continued falls in house prices, concerns around rising home loan arrears levels, a borrowing squeeze in response to the Banking Royal Commission and slow wages growth it appears the RBA has elected to allow the federal election to run its course before intervening.


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