While most economists are predicting the next rate move the RBA
makes will be upward, one industry figure has claimed interest rates may not yet have found their floor.
1300HomeLoan managing director John Kolenda has said flat demand for home loans, a rise in unemployment and concern about the government's ability to push through its budget measures could see the RBA cut rates.
“The direction of the RBA’s next move has been sitting at 50/50 for some time but more recent factors such as the government’s difficulty in getting some of its tough budget measures through the new Senate are changing the game," Kolenda said.
Kolenda said it was more likely that the RBA would remain on the sidelines as the Australian dollar stayed high and consumer confidence and spending remained sluggish.
“Whichever way the RBA goes, home loan customers have had the benefit of historically low rates, and we should stay in a low rate climate for at least the next six to 12 months,” he said.