The Reserve Bank of Australia lowered its cash rate by 25 bps to a new record low of 0.75 percent during its September meeting, the third rate cut this year, aiming to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target. Policymakers also signalled the need for an extended period of low interest rates, while saying the central bank is prepared to ease monetary policy further if needed. Interest Rate in Australia averaged 4.35 percent from 1990 until 2019, reaching an all time high of 17.50 percent in January of 1990 and a record low of 0.75 percent in October of 2019.

Interest Rate in Australia is expected to be 0.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Australia to stand at 0.25 in 12 months time. In the long-term, the Australia Interest Rate is projected to trend around 0.75 percent in 2020, according to our econometric models.

Australia Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-07-02 04:30 AM RBA Interest Rate Decision 1.0% 1.25% 1% 1%
2019-08-06 04:30 AM RBA Interest Rate Decision 1% 1% 1% 1%
2019-09-03 04:30 AM RBA Interest Rate Decision 1% 1% 1% 1%
2019-10-01 04:30 AM RBA Interest Rate Decision 0.75% 1% 0.75% 0.75%
2019-10-17 08:00 PM RBA Gov Lowe Speech
2019-11-05 03:30 AM RBA Interest Rate Decision 0.75% 0.75%
2019-11-08 12:30 AM RBA Statement on Monetary Policy



RBA Cuts Rates to All-Time Low

The Reserve Bank of Australia lowered its cash rate by 25 bps to a new record low of 0.75 percent during its September meeting, the third rate cut this year, aiming to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target. Policymakers also signalled the need for an extended period of low interest rates, while saying the central bank is prepared to ease monetary policy further if needed.

Excerpt from the statement by Governor Philip Lowe: 

While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes are affecting international trade flows and investment as businesses scale back spending plans because of the increased uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken further steps to support the economy, while continuing to address risks in the financial system.

The Australian economy expanded by 1.4 per cent over the year to the June quarter, which was a weaker-than-expected outcome. A gentle turning point, however, appears to have been reached with economic growth a little higher over the first half of this year than over the second half of 2018. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending.

Employment has continued to grow strongly and labour force participation is at a record high. The unemployment rate has, however, remained steady at around 5¼ per cent over recent months. Forward-looking indicators of labour demand indicate that employment growth is likely to slow from its recent fast rate. Wages growth remains subdued and there is little upward pressure at present, with increased labour demand being met by more supply. Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.

Inflation pressures remain subdued and this is likely to be the case for some time yet. In both headline and underlying terms, inflation is expected to be a little under 2 per cent over 2020 and a little above 2 per cent over 2021.

There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity has weakened and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

The Board took the decision to lower interest rates further today to support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target. The economy still has spare capacity and lower interest rates will help make inroads into that. The Board also took account of the forces leading to the trend to lower interest rates globally and the effects this trend is having on the Australian economy and inflation outcomes.

It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.


RBA | Rida Husna | rida@tradingeconomics.com
10/1/2019 9:31:27 AM



Australia Money Last Previous Highest Lowest Unit
Interest Rate 0.75 1.00 17.50 0.75 percent [+]
Money Supply M0 112.57 113.75 114.54 4.09 AUD Billion [+]
Money Supply M1 1022.78 1014.60 1022.78 8.25 AUD Billion [+]
Interbank Rate 1.22 1.10 18.18 1.10 percent [+]
Money Supply M3 2131.12 2128.07 2157.45 10.19 AUD Billion [+]
Foreign Exchange Reserves 69039.00 72210.00 88457.00 1126.00 AUD Million [+]
Banks Balance Sheet 4483.06 4404.79 4483.06 322.97 AUD Billion [+]
Central Bank Balance Sheet 174749.00 182499.00 202663.00 30418.00 AUD Million [+]
Loans to Private Sector 954.74 950.11 962.36 20.21 AUD Billion [+]
Deposit Interest Rate 1.35 1.45 17.25 1.35 percent [+]
Private Debt to GDP 205.30 205.30 209.60 120.50 percent [+]


Australia Interest Rate

In Australia, interest rates decisions are taken by the Reserve Bank of Australia's Board. The official interest rate is the cash rate. The cash rate is the rate charged on overnight loans between financial intermediaries, is determined in the money market as a result of the interaction of demand for and supply of overnight funds. This page provides - Australia Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Australia Interest Rate - actual data, historical chart and calendar of releases - was last updated on October of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
0.75 1.00 17.50 0.75 1990 - 2019 percent Daily




Country Last Previous
Argentina 68.00 Oct/19
Turkey 16.50 Sep/19
Mexico 7.75 Sep/19
Russia 7.00 Sep/19
South Africa 6.50 Sep/19
Brazil 5.50 Sep/19
Indonesia 5.25 Sep/19
India 5.15 Oct/19
China 4.20 Oct/19
Saudi Arabia 2.50 Sep/19
United States 2.00 Sep/19
Canada 1.75 Sep/19
Singapore 1.72 Sep/19
South Korea 1.25 Oct/19
Australia 0.75 Oct/19
United Kingdom 0.75 Sep/19
Euro Area 0.00 Sep/19
France 0.00 Sep/19
Germany 0.00 Sep/19
Italy 0.00 Sep/19
Netherlands 0.00 Sep/19
Spain 0.00 Sep/19
Japan -0.10 Sep/19
Switzerland -0.75 Sep/19


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