The recently released minutes from the February meeting of the Reserve Bank of Australia indicate there’s little likelihood of continued rate hikes, giving mortgage and credit card holders a chance to catch their breath.

Analysis of the February minutes show the RBA members are satisfied with the current cash rate of 3.75%, referring to it as “no longer exceptionally accommodative,” but rather “somewhat below average,” and that future rate rises will be debated each month based upon current economic data. This signals an easing of the tightening bias borrowers endured in late 2009, with three consecutive rate hikes of 25 basis points each prior to Christmas.

The current level is described as allowing the RBA “a degree of flexibility” and no longer “requiring an increase at every meeting.”

With the cash rate linked directly to mortgage repayments and influencing credit card interest rates, this can only be considered good news by loan holders of all varieties.

This year the RBA celebrates its 50th anniversary. At a celebration last week, RBA Governor Glenn Stevens linked higher interest rates with unrestrained government spending, implying that the way to achieve “a lengthy period of rather low short-term interest rates” is through a balanced budget.

Source: http://www.smh.com.au/