Welcome to the June 2023 Dominion Finance Newsletter! We appreciate your continued support and trust as we navigate through the final month of the financial year together. In this ever-evolving economic landscape, inflation rates continue to rise, prompting the Reserve Bank of Australia (RBA) to make adjustments to the cash rate. Experts predict further increases in the near future. While the media highlights the challenges faced by everyday Australians, such as inflation, rental shortages, and housing concerns, it’s important to acknowledge that despite the hardships, discretionary spending remains resilient at this stage.
Despite the RBA’s efforts to manage spending, many individuals are still using their pandemic savings to enjoy personal luxuries and improve their homes. Overseas travel, in particular, has seen an uptick. However, it’s essential to consider the potential impact of rising interest rates on mortgage holders. By year-end, most individuals can expect their repayments to double, potentially leading to financial strain. It’s crucial to prepare for such challenges, especially if significant commitments like overseas holidays, car leases, or holiday homes are part of your financial landscape. As we navigate these changing times, it is essential to approach our financial journeys with proactive decision-making.
Taking the time to understand our finances, budget wisely, track our spending, and exercise discipline will position us for success in the face of uncertainty. As we bid farewell to June, we encourage you to stay warm and remember, we are here to assist you in achieving your financial goals. We understand that managing your finances can be complex and overwhelming at times, and we are ready to provide guidance and support.
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 4.10 per cent. It also increased the interest rate paid on Exchange Settlement balances by 25 basis points to 4.00 per cent.
Inflation in Australia has passed its peak, but at 7 per cent is still too high and it will be some time yet before it is back in the target range. This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.
The information provided in this newsletter is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial advice. Before acting on any information in this newsletter, you should consider its appropriateness in relation to your personal situation.