The RBA still has more room to move than most other central banks around the world.
The Reserve Bank of Australia (RBA) remains under growing pressure to lower its cash rate despite staying in a holding pattern for the past five months.
The economic slowdown in China remains a massive concern for Australia and the main reason why the RBA could decide before the end of the year to drop official rates from their current record low of 2.0 per cent.
The recent report by the International Monetary Fund (IMF) which forecast diminishing growth for commodity exporters such as Australia highlights the need for lower interest rates. There is a growing view from economists that further rate cuts will be needed to drive the Australian dollar even lower to boost exports and to encourage international tourism and stimulate jobs growth.
Although lower interest rates are not good news for some investors, they have helped borrowers and bolstered consumer confidence during challenging economic times.
A recent online survey by Cigna Wealth found 60 per cent of respondents expected the RBA to lower rates again this year after it made cuts of 25 basis points in both February and May. The RBA still has more room to move than most other central banks around the world.
Cigna Wealth’s advice to home loan customers is to take advantage of the low interest rate regime and pay down mortgages as much as possible.