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ISCOVER
Staff Reporter
Loan Market Group is urging the Reserve Bank of Australia to leave the official cash rate on hold for the rest of the year.
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According to the company’s chief operating officer Dean Rushton, interest rates are already high enough and are consequently having a negative impact on housing finance.
“The economic activity in Australia has been patchy despite encouraging figures in some sectors,” he said.
“The home finance sector in particular has been struggling for many months as a result of the three RBA increases this year and the three implemented late last year.
“Our sector would benefit from the RBA leaving the official rate at its current level of 4.5 per cent until at least early next year.”
Mr Rushton said banks were still likely to lift rates independently of the RBA because their cost of funds remains high due to external markets and the roll-over of cheaper funding.
“Even their traditionally cheaper sources of funding such as deposits are now more expensive due to the intense competition for deposits in the Australian market.”
