The Reserve Bank of Australia has held the cash rate at 1.50% on their last meeting of the year

The Reserve Bank of Australia has held the cash rate at 1.50% at their December meeting. This is the 15th consecutive month the RBA has held the cash rate, after cutting to the historic low of 1.50% in August 2016.

Once again, the RBA’s result was correctly predicted by the experts polled.

There are plenty of reasons for the RBA to leave the cash rate where it is. Overall house prices were flat in November and Sydney has seen a drop in prices over the last few months. Rates can’t really get much lower than where they are and tightening restrictions on interest only and investment lending currently make it harder to get those types of loans. This effect is similar to a rate rise in some respects.

And with mortgage debt a major cause of stress in Australian households, a rise in the cash rate could have troubling effects on Australian borrowers.

The Reserve Bank doesn’t meet in January, so the bank will make its next cash rate decision on 6 February 2018.