05/05/2015 – For the second time this year the Reserve Bank of Australia (RBA) has cut the official interest rates down to a record low of 2 percent. The decision to reduce the official cash rate was widely expected however the debate centered around when the cut would be announced with some in the market expecting as early as April whilst others were expecting after June.
In his talks with clients over the past couple of months Managing Director Brett Evans has been calling for the rate cut to occur in either May or June citing that April was too early after the February cut and any later than June may let the economy fall too quickly and away from the Reserve Bank’s Glenn Stevens monetary control.
The Australian Dollar fell sharply on the news hitting $0.7801 before rebounding to $0.7901. In its statement the RBA outlined that they were seeing improved trends in household demand and stronger growth in employment. It also added that a low inflation environment provides further scope for rate cuts with further falls in the Australian dollar not only necessary but expected.
This is good news for Australian expats as a falling Australian dollar will make any repatriation of funds or investments back to Australia more appealing, especially when they are coming from currencies that have strengthened recently like the US dollar and other currencies that are pegged to the USD.
“We have seen quite a large increase in new client enquiries in the last 6 months coming from Aussie expats who are now revisiting Australia as a investment opportunity due to the falling AUD. I think this will increase as the AUD falls further and the opportunities open to expats become more appealing” explained Evans.