FIXED INTEREST TERM DEPOSIT and FIXED RATES REACH THEIR LOWS
Australia ’ s recovery from COVID continues to challenge fixed interest investors , and may continue to do so for 2 years .
The Reserve Bank of Australia ( RBA ) has declared the cash rate will be held low to support borrowers , business , residential and government in the aim to boost economic activity , reignite inflation , corporate ‘ pricing power ’ and personal wage increases . The RBA has been active in short and long maturity bond markets seeking to also hold down government bond rates out to 10 years maturity . At the same time , the RBA seeks to hold the Australian dollar to boost export revenue .
Record low borrowing rates were recorded in the December quarter 2020 , in tandem with record low bond rates .
Record-breaking levels of government and ‘ central bank ’ stimulus internationally have boosted share markets and real estate prices . All this may see the prospect of modest increases in inflation , but not likely before the second half of 2021 .
Recognised Australian bank 6 month term deposits average under 0.30 %.
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