The Reserve Bank of Australia (RBA) has held the cash rate for another month - after it was slashed to 0.10% in November 2020 - which was widely anticipated by economists.

Last month, the RBA decided to cut its quantitative easing tap, which saw the Reserve Bank purchasing $4 to $5 billion of government bonds weekly for almost two years. The last bond purchase took place on 10 February 2022.

RBA Governor Dr Philip Lowe said the war in Ukraine is a "major new source of uncertainty".

"Inflation in parts of the world has increased sharply due to large increases in energy prices and disruptions to supply chains at a time of strong demand.

"The prices of many commodities have increased further due to the war in Ukraine."

Dr Lowe said the economy remains 'resilient', with unemployment at a 14-year low of 4.2%, as well as low underemployment.

"Wages growth has picked up but, at the aggregate level, is only around the relatively low rates prevailing before the pandemic. A further pick-up in wages growth and broader measures of labour costs is expected as the labour market tightens," Dr Lowe said.

"Inflation has picked up more quickly than the RBA had expected, but remains lower than in many other countries."

Dr Lowe said that the central forecast is for underlying inflation to increase in the coming quarters to around 3.25% before declining to around 2.75% over 2023.

"Financial conditions in Australia continue to be highly accommodative. Interest rates remain at a very low level, although some fixed rates have risen recently," he said.

"The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target.

"The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range."

Also chiming in on the RBA's decision was Harley Dale, Chief economist at CreditorWatch, who said the RBA won't budge in the current environment.

"The Reserve Bank of Australia confronts some key uncertainties in the final month of the March 2022 quarter. Against this backdrop, it’s no surprise that the RBA Board determined not to raise the Official Cash Rate in March," Mr Dale said.

"The dynamics have changed yet again from the start of 2022 when conjecture about interest rate rises was considerably more rampant."

Mr Dale said that the Ukrainian crisis provides substantial geo-political uncertainty.

"Damaging economic and humanitarian consequences have yet to play out and discussion of petrol prices here in Australia hitting two dollars a litre won’t be lost on consumers," Mr Dale said.

"Consumer confidence has already been trending down for nearly 12 months and supply chain issues associated with the crisis is likely to lead to a higher demand in groceries, sparked interest rates and steeper mortgage repayments."

Mr Dale also said that the 'post restriction COVID world' is yet to play out with both businesses and consumers, and that other factors like an upcoming election, industries at risk, and slow wages growth will weigh on the RBA's decision.

"The short of it is that the RBA is still in sit and wait mode," Mr Dale said.

"The situation between Russia and the Ukraine likely throws some delay into interest rate expectations here, although we do have a highly anticipated Federal Reserve rate decision in the United States later this month."

Previous big bank predictions

All four big banks have already anticipated rate hikes to begin this year. CBA predicts the first cash rate rise will come as soon as June 2022, while NAB economists anticipate the first hike to come in November.

In the middle of these two predictions are Westpac and ANZ. Westpac economists predict that the first cash rate hike will come in August, and ANZ economists have predicted that hikes will start in September 2022.

Below are the timelines for rate hikes most previously stated from Australia's major four banks:

  • CBA economists predicted a 'neutral' cash rate of 1.25% by March 2023
  • Westpac economists believe the cash rate will be 1.75% by March 2024
  • ANZ anticipates the cash rate will reach 2.00% by November 2023 and exceed 3.00% after 2024
  • NAB economists forecasted the cash rate to hit 2.50% in November 2024

Fixed home loan rates rising despite steady cash rate

Even though there has been no cash rate movement for a good 16 months, many banks and lenders have already started bracing for a cash rate hike.

This is evident in the number of fixed-rate mortgages that have increased over the past few months.

Last week alone, ANZ hiked its fixed rate home loans by up to 66 basis points, while other lenders such as ING, Suncorp, Bendigo Bank, Tic:Toc and bcu also hiked their fixed-rate mortgages.

Not to mention the week prior a handful of other lenders increased their home loan fixed rates

Despite fixed rates generally going up, variable home loan rates have widely declined across many banks and lenders. 

Also read: Is it too late to fix your home loan?


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.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
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Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . View disclaimer.

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