RBA pushes rate rates for 3rd straight month

The cash rate will rise to 3.75% tomorrow following today's meeting of the RBA monetary policy committee - the third consecutive 25 basis points rise since September 2009.

Many mortgage brokers had expected the cash rate to rise, though they were hoping for a reprieve due to the fragile state of the world economy (in light of the Dubai debt crisis), Christmas sales concerns and to give the previous two rate rises the opportunity to have some kind of effect.

Commenting on today's decision, RBA governer Glenn Stevens said: "The Board’s assessment of the outlook remains much as in the November Statement on Monetary Policy. Growth in 2010 is likely to be close to trend and inflation close to target.

"With the risk of serious economic contraction in Australia having passed, the Board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker. These material adjustments to the stance of monetary policy will, in the Board’s view, work to increase the sustainability of growth in economic activity and keep inflation consistent with the target over the years ahead."