Good news for those with Australian Mortgages

What can be only seen as good news for those with Australian Mortgages or the need to Buy Australian Dollars the Reserve Bank of Australia gave the strongest indication that interest rates will be cut in the coming months.

Today the Pounds to Australian Dollar exchange rate is trading at 2.14000 to Buy Australian Dollars

THE minutes of the Reserve Bank's August board meeting have all but confirmed there will be an interest rate cut next month.

But the minutes gave little encouragement to market speculation that the central bank could cut the official cash rate by 50 basis points, economists say.

The minutes of the meeting, at which the cash rate was left unchanged at at 12-year high of 7.25 per cent, said "a case could be made for an early reduction in the cash rate".

Board members were conscious that financial conditions were "clearly quite tight and effectively getting tighter as a result of ongoing pressure on lenders cost of funds in the market", the minutes said.

"Given there had been a significant change in borrowing behaviour, confidence was weaker, asset prices had declined and slower overall growth was in prospect, tighter financial conditions were not warranted," the minutes said.

"Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase."

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