 Interest rate hopes
The Reserve Bank of Australia remains quiet on whether rates will rise and when. This Friday the RBA will face questions from Parliment about future policy, but until then Governor Glenn Stevens will not answer questions.
The meeting on Friday should give home owners and potential buyers a sign as to when rates might start to rise.
Nomura Australia chief economist Stephen Roberts expects the central bank to keep the cash rate on hold until early 2010. “My guess is that he will be very cagey in answering that question and will want to leave a fair bit of flexibility,” “That’s simply because you did have 110,000-odd people who took up the (increased) first home buyer grant. They’ve got whopping mortgages and are going to be highly vulnerable,” Mr. Roberts said.
However, regardless of what the RBA does with official rates, banks and other lenders are free to change home loan interest rates as they .
It is expected that House of Representatives Economics Committee, will try to fix Mr Stevens down to a date of when rates will rise.
The RBA cut has cut the official rate down to 3 per cent since September 2008 in an attempt to shield Australia from the global financial crisis.
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