RBA leaves cash rate unchanged at 0.10% in June

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on June 01, 2021
RBA leaves cash rate unchanged at 0.10% in June

Today the Reserve Bank left the cash rate unchanged at 0.10%, for the seventh consecutive month.

RBA Governor Dr Philip Lowe has maintained that the cash rate will not change until wage growth and inflation are both 'comfortably' above the 2-3% threshold, with unemployment also improving.

"For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest," he said.

However, New Zealand's Reserve Bank (RBNZ) has signalled that it could raise its cash rate as early as mid-2022, pending more positive economic data.

CEO of digital lending platform 'WLTH' Brodie Haupt predicted the RBA will maintain its 2024 guidance on lifting the cash rate.

"Even with strong growth in the property market over the last few months, the RBA looks set to hold rates for the foreseeable future," he said.

"The RBA has continuously said that they won't be increasing the cash rate until inflation is back within the target range and with no sign of this at the moment, I can't see the rates lifting earlier than expected."


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 15, 2022. View disclaimer.


APAC economist for jobs search site Indeed, Callam Pickering, explained the RBA's thinking behind maintaining the cash rate at 0.10%.

“Right now, the Australian economy is a mile away from justifying tighter monetary policy. The RBA hasn’t hit their inflation target in five-years, we haven’t had wage growth of 3% or higher in eight-years and the unemployment rate hasn’t been below 4.5% since 2008," he said.

Mortgage Choice CEO Susan Mitchell said today's rate decision was "unsurprising".

“Pleasingly, data from the Australian Bureau of Statistics (ABS) revealed that the unemployment rate continues on its downward trend, however, we’re a long way off seeing a marked improvement to wages growth," she said.

"There are signs the nation's economic recovery is on track but the latest lockdown in Victoria is a reminder that monetary and fiscal support will be required for some time yet."


Photo by Tim Bish on Unsplash



Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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