The Reserve Bank of Australia’s (RBA) decision to hold rates steady at 3.85% today was a genuine surprise to markets and most economists. Leading up to the meeting, there was a strong sense that the RBA would cut rates up to 25 basis points.
Should we have been surprised?
Given the overwhelming market and economist consensus for a cut, the rate hold was objectively a surprise. However, a minority of analysts did warn that the RBA might pause to await more comprehensive inflation data. In addition the central bank itself had signalled a cautious, data-dependent approach in previous statements. With inflation just within target and global risks elevated, the RBA’s caution, while surprising, was not entirely without precedent.
So what does this mean for business lending? Lenders rates and terms vary widely. Regardless if rates are up, down or steady, speak to your broker because comparing offers remains critical to secure the best possible deal for your business needs.
