Why do interest rates go up and down?
It’s the first Tuesday of the month. Every month on this day the board of the Reserve Bank of Australia meets to set official interest rates. The RBA’s official rate affects the retail mortgage rates that banks and other lenders charge their borrowers.
The RBA’s main task is to limit consumer price rises (inflation) to 2 to 3 per cent. The RBA also wants to boost employment and economic growth. The RBA has cut rates 10 times in a row over the last two years as it seeks to encourage investment and jobs growth.
The Reserve Bank is expected to cut rates further over the next few months.