New year, same rate
The Reserve Bank has left official interest rates on hold at its first meeting for 2024.
The decision, which had been widely predicted, comes amid speculation the rapid rise in interest rates inflicted on borrowers in the past 18 months has come to an end.
It leaves the official cash rate at 4.35 per cent, where it has been since the last rise in November.
It also means households will be spared another $78 increase in monthly repayments on a typical $500,000, 25-year home loan that would have occurred had the RBA hiked interest rates again.
Home-loan borrowers have already faced more than $1200 in monthly repayment increases since the bank began hiking rates in May 2022.
Tuesday’s pause follows a promising run of domestic data that had most forecasters tipping an end to hikes, and looking with a renewed focus on when cuts will begin.
Critically, inflation eased to 4.1 per cent in the December quarter, a two-year low. It was down from 5.4 per cent in September, and was lower than expected.
Combined with signs of heat coming out of the labour market and subdued consumer spending, the RBA board had been almost universally tipped to make the decision it did.
