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RBA Cuts Rates To 2.5 Per Cent

By Rebecca Zhang

The Reserve Bank of Australia’s decision to cut the cash rate at its board meeting today was not influenced by the state of the property market, according to the Ray White Group.

Ray White Group chairman Brian White says the strength or weakness of the real estate market in Australia ordinarily has a considerable impact on the cash rate decision.

“Clearly, the decision has been based on factors other than the current state of the real estate market,” Mr White said.

“This is the first time in living memory where real estate would not have been a factor. The current market has been remarkably strong resulting in a shortage of stock for sale in many areas across the country.”

“This decision will enable Australian to go to the election on September 7 in an environment of a strong market – a situation that has traditionally been good for incumbent governments,” Mr White concluded.

Under its current inflation targeting regime, the Reserve Bank of Australia has set the cash rate to the lowest point ever.

Since changing its monetary policy to target inflation in 1990, the RBA has not held the cash rate at a lower point and with the slowing of several sectors of the economy, it’s a move that that will help encourage consumer spending and keep inflation within the RBA’s target of 2-3 per cent, from its current 2.4 per cent.


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