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RBA Reaffirms 2.75% Interest Rate

By David Bell

The base interest rate will remain at 2.75 per cent, the Reserve Bank of Australia (RBA) has announced.

Last month, the RBA decided to reduce the key cash rate by 0.25 percentage points, bringing it to historic lows.

News that rates will stay down may be welcomed by people hoping to purchase real estate in Norman Gardens and Rockhampton, as mortgage repayments are likely to fall in line with the interest levels.

Real Estate Institute of Australia president Peter Bushby said properties are at the highest level of housing affordability seen since the December quarter of 2009.

"Recent interest rate cuts and improvements in affordability are being converted into more loan commitments and higher auction clearance rates," he explained.

Glenn Stevens, governor of the RBA, stated that below trend global growth and a similarly sluggish performance domestically helped guide the decision.

"At today's meeting the board judged that the easier financial conditions now in place will contribute to a strengthening of growth over time," he added.

Despite keeping interest rates at 2.75 per cent, Mr Stevens said there is still room for further reductions in the future, particularly if inflation figures need to be kept in check.

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