As you know the Reserve Bank has decided to leave rates on hold again this month. It was interesting there for a while, that we had stable interest rates but didn’t know who our government was going to be! Can you imagine the same thing happening in the USA or some European countries? Personally I don’t think their money markets would be as stable and that goes a long way into explaining why interest rates are on hold. Basically our economy is currently stable and performing as the Reserve Bank likes, within their designated trigger ranges.

As I have stated before, my personal view is we should still prepare for one more rate rise this current year, hopefully it will not come, but it is still a definite possibility. What 2011 will bring only time can tell.

The property market seems to have gone into a holding pattern with many investors taking a wait and see approach.

Over the last couple of months, even though variable rates have remained stable, fixed rates have been continuing to fall from their previous high levels and are now coming more in line with standard variable rates in many cases. In the past this has been an indicator of a steadier rate period, hopefully history repeats in this instance.

The link attached is the Media release from the Reserve Bank about this month’s announcement, if you would like to know more.

Until next month.