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Borrowers are split over whether or not the Reserve Bank of Australia (RBA) will cut the official cash rate when the Board meets again on Tuesday.
According to a new poll by Loan Market, 45 per cent of the 583 respondents said they expected the RBA to keep rates unchanged at 2.75 per cent while another 45 per cent forecast a 25 basis point drop.
Loan Market director Mark De Martino said that election uncertainty and a mixed bag of economic data were making the August rate decision a difficult one to predict.
“The RBA has a difficult decision to make in August because the cash rate is already so low and further rate reductions are going to have a limited impact without other areas of support,” he said.
“While home owners and prospective buyers are reaping the benefits of the lowest cash rate in several decades, it’s been equally encouraging to see banks and lenders start to offer big discounts and rate movements not normally seen when the RBA is holding the cash rate idle.”
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