min read
· Posted on
February 21, 2024

Interest rates September 2023: Not one, not two, but THREE months of no change

The RBA has once again decided to hold to cash rate this month at 4.10%

What's the key learning?

The man has delivered! In his last month as the RBA Governor, Phillip Lowe has dropped the mic…but held the cash rate at 4.10%

Talk about going out on a high.

That means the cash rate has been kept at 4.10% for the last not one, not two…but three RBA meetings.

It’s giving…cost of living stability.

This is HUGE. Because the RBA hasn’t kept the cash rate steady for this long since early 2022.

And with three months of a steady cash rate, we’re seeing a clear signal that prices are finally cooling down.

In fact, inflation has dropped to its lowest level in 17 months, with the annual rate sitting at 4.9% as of July.

Australians since last year waiting for inflation to drop

This has mainly been led by a drop in prices for fresh produce and automotive fuel.

So mortgage holders, sit down, take a deep breath because your mortgage is staying put this month. Phew.

Luckily the RBA’s decision was also in line with what experts were expecting. 

In fact, for a change, all four big banks predicted the same thing, for the RBA to hold the cash rate.

We are in the clear for now thankfully, but we can’t rule out the possibility of a future cash rate rise, as the RBA’s target inflation rate is still 2-3%. 

Remind me, what happens when interest rates rise?

When the RBA increases the cash rate, the banks will almost always follow suit and raise the interest rate on your loan. 

Experts say it takes around two or three months for individuals to feel the full impact of a rate rise on their cash flow… so the impact of these successive rises won’t be felt until the new year. 

And your interest rate on your savings account should increase too (but often doesn’t increase to the same extent).

Why does it feel like rates are so much higher than usual?

You’re not imagining it, they are! But it probably feels even higher because as recently as May 2022, interest rates were at a historic low of 0.1%.

Here’s a recap of the rises this year:

  • May 4th 2022: 0.35%
  • June 8th 2022: 0.85%
  • July 6th 2022: 1.35%
  • August 3rd 2022: 1.85%
  • September 6th 2022: 2.35%
  • October 4th 2022: 2.60%
  • November 1st 2022: 2.85%
  • December 6th 2022: 3.1%
  • February 7th 2023: 3.35%
  • March 7th 2023: 3.60%
  • April 4th 2023: 3.60%
  • May 2nd 2023: 3.85%
  • June 6th 2023: 4.10%
  • July 4th 2023: 4.10%
  • August 1st 2023: 4.10%
  • September 4th 2023: 4.10%

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating