Bank rates around the world start to rise as the RBA holds firmly in neutral

Bank rates around the world start to rise as the RBA holds firmly in neutral

The RBA has today held the cash rate at 1.50 per cent for the last meeting of 2018, with potential for the pattern to be repeated in 2019.

The RBA’s trend of holding rates puts Australia out of step with a number of key economies around the world, as central banks start to lift rates, a decade after the global financial crisis.

Ten of the countries in the G20 today have higher benchmark rates compared with the start of the year.

Most notably the United States has hiked three times this year and is tipped to lift for a fourth in the middle of this month.

Sally Tindall, research director at RateCity.com.au, said it was doubtful the RBA would follow in the United States’ footsteps in the new year.

“The RBA has officially shut the door on a hike to the cash rate in 2018 and is unlikely to consider the possibility until late 2019,” she said.

“The RBA’s hands will be tied until at least after the next Federal election. In the meantime, inflation, wages growth and household debt have a lot of work to do.

“The good news is that Australian home owners can rest easy this Christmas. That said, now is the perfect time to stash a bit of money into the mortgage, instead of putting it all under the Christmas tree.”

Benchmark interest rates around the world

G20 Countries

1 January 2018

4 December 2018

Change

Argentina

28.75%

60.28%

+31.53%

Australia

1.50%

1.50%

0.00%

Brazil

7.00%

6.50%

-0.50%

Canada

1.25%

1.75%

+0.50%

China

4.35%

4.35%

0.00%

France

0.00%

0.00%

0.00%

Germany

0.00%

0.00%

0.00%

India

6.00%

6.50%

+0.50%

Indonesia

4.25%

6.00%

+1.75%

Italy

0.00%

0.00%

0.00%

Japan

-0.10%

-0.10%

0.00%

Republic of Korea

1.50%

1.75%

+0.25%

Mexico

7.25%

8.00%

+0.75%

Russia

7.75%

7.50%

-0.25%

Saudi Arabia

2.00%

2.75%

+0.75%

South Africa

6.75%

6.75%

0.00%

Turkey

8.00%

24.00%

+16.00%

United Kingdom

0.50%

0.75%

+0.25%

United States

1.25% – 1.50%

2.00% – 2.25%

+0.75%

European Union

0.00%

0.00%

0.00%

 

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