[Infographic] RBA Decision Day: What’s on the Cards for Interest Rates?

The Reserve Bank of Australia board meets today to decide on the direction of interest rates, a decision which affects, directly or indirectly, almost every Australian.

After last month’s cut to a record low of 2 per cent, analysts are mostly expecting the board to hold steady this time around thanks to a lower Australian dollar, improved business confidence and increasing levels of household debt.

According to Peter Arnold, Financial Analyst at RateCity, “We know that the property-investor market is continuing to heat up – something that the regulator wants to control – and household debt levels remain worryingly high. That, combined with higher business-confidence levels after the Federal Budget announcement, means there is less need for a rate reprieve for businesses and consumers alike.

“On top of this, the Aussie dollar has been heading down since the May rate cut, which gives the RBA some breathing room to leave rates on hold this month,” he said.

But there is still scope for a cut if the board decide that the economy is in need of a further boost.

To help you understand the drivers behind today’s decision, this infographic is a simple summary of what’s happening with our key economic variables, and what the board will be taking into account when they meet this afternoon.


Image: RateCity