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Interest Rates

4 Reasons Why the Australian Reserve Bank has not Cut Interest Rates

Australian Reserve Bank has not Cut Interest Rates

The Reserve Bank of Australia (RBA) has slashed interest rates to 3%, a record low, in November 2011. For the last 15 months, it has refused to increase or further cut it. The central bank has decided to leave the rates unchanged during its first policy meeting for this year, which was held in the first week of February. As it seems, the monetary policy of the country keeps the mode on a wait-and-see program.

Interest rates were last trimmed down to help spur possible growth after the then decade-long mining boom had indicated clear signs of losing its momentum. The economy somehow slowed in the entire 2012 because export demand for raw materials coming from the country eased.

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Debt Consolidation

Reserve Bank Urges Australians to Avoid Panic

Despite the many impending pressures imposed by the Global recession, the Reserve Bank remains optimistic about Australia’s financial future.

Rising unemployment, pricey living costs, increasing household debts; it all seems bad news for Australian household budgets. However the Australian Reserve Bank Governor Glenn Stevens urged consumers to have “quiet confidence” about their financial future.

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Interest Rates

First Interest Rate Cut in 7 Years

Australians have welcomed with open arms the Reserve Bank’s first official drop of interest rates in 7 years. The RBA on September 2nd, dropped its cash rate by 0.25 to 7%, its first cut since December 2001.

While this comes as a certain relief to many families struggling under the pressure of mortgages, many are still cautious. As Prime Minister Rudd announced “Interest rates took a long time to rise and they will take a long time to come back down. And the road will be a very uneven one on the way through.” However many remain optimistic, especially those struggling to make ends meet, and spiralling into debt.