Latest NewsRba Keeps Interest Rates on HoldThursday, 27 April 2017

Home owners have been spared another rise in mortgage repayments, with the reserve Bank opting to keep interest rates on hold.

At its first meeting for 2011 this week, the RBA kept the official cash rate at 4.75 per cent. Rates rose by a quarter of a percentage point four times last year, with the last hike in November.

The decision to stay put was in line with the expectations of economists and the credit market. The latter is pricing in less than one quarter-percentage point rise this year.

The accompanying comments by the RBA suggest borrowers worried about higher interest rates can rest easy for a while, says Macquarie economist Ben Dinte.

"There’s definitely no urgency to act in the near-term, given the (flood) disruption to activity we’ve seen," said Mr Dinte, adding that Macquarie expects only one interest rate hike in the middle of the year.

The commercial banks, however, could raise interest rates outside the RBA cycle - a move that has sparked consumer and political fury in the past.

The dollar was little changed on the news, edging briefly above parity with the US dollar in recent trade before easing back.

Employment growth was unusually strong in 2010. Most leading indicators suggest further growth, though most likely at a slower pace.

After the significant decline in 2009, growth in wages picked up somewhat last year. Some further increase is likely over the coming year.

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