RBA Cash Rate Announcement December 2023

It’s the news homeowners were hoping for – the Reserve Bank of Australia (RBA) has decided the cash rate will remain on hold for the moment at 4.35 per cent.

Read today’s official statement on the RBA’s website.

But it would appear there may be further cash rate hikes on the horizon.

“While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected,” RBA Governor Michele Bullock said in a recent statement.

“CPI inflation is now expected to be around 3.5 per cent by the end of 2024 and at the top of the target range of 2 to 3 per cent by the end of 2025.”

The Federal Government is set to introduce legislation to overhaul the Reserve Bank of Australia (RBA) in its biggest shake-up since the central bank's foundation.

The independent review of the bank in April recommended sweeping changes including a reduction from 11 interest rate board meetings a year to eight, with each to be held over two days.

Many mortgage holders are now wondering how the looming changes will affect interest rate decisions.

Some have suggested that there could be larger jumps in the cash rate, given the RBA will have fewer chances to change it. Others don’t believe bigger increases or falls are guaranteed under the new structure.

The first RBA board meeting under the new structure will be in February 2024.

Meanwhile, it was recently revealed that almost half of Australia’s mortgage holders are in financial stress, spending at least 30% of their income on servicing their loans.

If you’re feeling the pressure of the interest rate hikes this year, get in touch to discuss what options are available to you.

 Need help understanding what this announcement means for you? Contact us today!