Cash Rate

At its June meeting, the Reserve Bank of Australia reduced the official cash rate to a historic low of 1.25%. Bank bill swap rates are as follows:

30 day

60 day

90 day

180 day

BBSW

1.20%

1.19%

1.18%

1.18%

This widely-expected result was the first reduction in the official cash rate since August 2016. The RBA Governor Philip Lowe said the move would help reduce unemployment and boost inflation back towards its 2-3% target range. The RBA remains optimistic about the Australian economy, seeing 2.75% growth this year and in 2020, despite some headwinds from the US-China trade dispute. Both CBA and NAB have passed on the full 0.25% cut to customers, however ANZ and Westpac only passed on 0.18% and 0.2% respectively.

The seasonally adjusted unemployment rate remained steady in May at 5.2%. The expectations of the major banks are for a further reduction of 25 basis points predicted in August 2019. This would see the official cash rate drop to 1% with many economists predicting the rate will fall to 0.75% in 2020.