RBA hands down cash rate call
In this special cash rate announcement, partnered by Legal Home Loans, learn the outcome of the Reserve Bank’s monthly cash rate decision – and how it’s likely to impact you.
The Reserve Bank of Australia (RBA) has announced its decision on the official cash rate for February amid speculation the central bank will hold rates.
Following Wednesday’s announcement the official cash rate is 0.75, with the board deciding to hold interest rates for the time being.
Top market and economic experts were not surprised by Wednesday’s announcement, although they believe further easing is coming.
In the lead up to Wednesday’s decision, comparison site Finder had surveyed 39 of the nation’s leading economists and commentators, and found a majority expect a rate cut by May this year.
“I expect the bank will hold. With latest employment data it is unlikely to cut. But I expect growth to continue sluggishly so there may be a cut or two down the track,” said Nicholas Gruen, Lateral Economics.
Highlighting stronger labour data Sarah Hunter of BIS Oxford Economics said the central banks would hold off cutting until later in the year.
“The recent labour market data has been more positive than we anticipated, so we’ve pushed back our call for one final rate cut to Q2 2020.
“But the forward indicators for jobs growth have continued to weaken (and the impact of the bushfires is a further downside risk), which means we still expect the RBA to cut one more time in this loosening cycle,” she said.
If rates are cut before May the official cash rate will be just one cut from the point where the RBA would consider instituting a quantitative easing program.