RBA Interest Rate Announcement February 2016

The RBA today has decided to leave interest rates unchanged. I read the statement as relatively upbeat which I wasn’t expecting.

Here is the summary of what the RBA said:

1. The global economy is moving at a moderate pace.
2. The financial markets are in heightened volatility with decreased appetite for risk.
3. Australian economic conditions are moderate.
4. Inflation is low.
5. Low interest costs are supporting demand with prudent lending standards containing risks in the housing market.
6. RBA board sees reasonable prospects for continued growth.

More details at http://www.rba.gov.au/media-releases/2016/mr-16-01.html

With the the Big 4 increasing their variable interest rates by 0.15-0.20% at the end of last year, there has been a bigger differential between the Big 4 interest rates and some of the second tier lenders. Not all of the smaller lenders raised their variable rates which was surprising but the smaller lenders who are banks can still access funds as required.