It was not a big surprise, but definitely a welcome move. The Reserve Bank of Australia (RBA) cut rates by a quarter of a basis point to 3.25% on Tuesday, the first rate movement since June's 0.25% drop.
October 4, 2012 (Newswire) - It was not a big surprise, but definitely a welcome move. The Reserve Bank of Australia (RBA) cut rates by a quarter of a basis point to 3.25% on Tuesday, the first rate movement since June's 0.25% drop.
The cut is the RBA responding to global uncertainty and a slowing Chinese economy which impacts on our mining sector. Economists are also watching the US money markets closely as they haven't recovered as quickly as predicted.
"I hope this rate cut boosts people's confidence as I believe we are nearing the bottom of the housing market, and the next few months will see gradual increase in house prices" says John Symond.
"According to RP Data research, we have already seen some increases."
"The upside is that this rate cut is a good way for you to get ahead with mortgage or loan repayments and should provide further impetus for first home buyers to enter the market. I also believe there may be further rate cuts later in the year, if not in early 2013."
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Short summary of the RBA release:
"Statement by Glenn Stevens, Governor: Monetary Policy Decision
At its meeting today [2nd of October 2012], the Board [of the Reserve Bank of Australia has] decided to lower the cash rate by 25 basis points to 3.25 per cent, effective 3 October 2012."