Loan Market Group’s chief operating officer Dean Rushton has urged the Reserve Bank of Australia to leave rates on hold when it meets next Tuesday.
According to Mr Rushton, the RBA risks seriously dampening economic activity if it raises official interest rates again before the end of the year.
“The economic activity in Australia is patchy and the home finance sector has been struggling for many months as a result of the RBA increases,” he said.
“The RBA would be doing everyone a favour if they leave the official rate at its current level of 4.5 per cent until at least early next year.”
Mr Rushton said falling demand for home loans and more competition from non-bank lenders had resulted in a number of the major banks easing their lending criteria.
“We are now seeing changes in policy with some banks increasing their lending ratios,” he said.
“Most lenders have also reduced their fixed rates and are even offering spring specials to increase business.
“In this sort of mixed signal climate there’s no need for the RBA to get involved.”
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