Australian Reserve Bank Drops Interest Rates

Australian Reserve Bank Drops Interest Rates
RBA expats

 

In a move that was widely anticipated by the financial markets, the Reserve bank of Australia has today dropped interest rates with a decrease of 25bps that will bring the official cash rate down to 3.50%.

As a result of this move the currency markets have reacted accordingly with the Australian Dollar trading at $0.9771 and the stock market has risen strongly by 1% to 4075.

The last two rate cuts are virtually an admission by the RBA that they got it wrong last year when they didn’t cut rates. The next big question will be by how much the banks pass on the rate cut to their customers. Last month we saw the banks retain some of the rate cut citing increasing costs in wholesale funding as the culprit.

Brett Evans is the Managing Director and a Financial Planner with Atlas Wealth Management which is the first financial services firm in Australia to specialise in providing financial advice to Australian expatriates. With over 20 years of experience in the finance and investments industry, Brett has worked for blue chip companies which include the Australian Stock Exchange (ASX), HSBC, Suncorp and Citi Smith Barney.

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