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RBA Maintains Interest Rate

By Ben Faulks

Belconnen real estate buyers may be encouraged to hear that interest rates will remain at historic lows this month, meaning mortgage repayments are also likely to stay low.

The Reserve Bank of Australia (RBA) revealed yesterday (June 4) that the key cash rate will be kept at 2.75 per cent – following a 0.25 percentage point drop last month.

Governor Glenn Stevens said economic information received since the last monetary policy meeting is consistent with global growth exhibiting below-trend performance.

He stated: "At today's meeting, the board judged that the easier financial conditions now in place will contribute to a strengthening of growth over time, consistent with achieving the inflation target.

"It decided that the stance of monetary policy remained appropriate for the time being."

Mr Stevens said there is further scope for increased quantitative easing in the coming months should the inflation outlook demand such a move.

Last month's interest rate drop was the first reduction this year, with the RBA making four cuts in 2012 – the largest of which was a 0.5 percentage point decline in May.

Real Estate Institute of Australia president Peter Bushby said the central bank's latest announcement is not a surprise following the May 2013 cut.

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