The Reserve Bank of Australia is likely to keep 'the official cost of borrowing' on hold at 1.5 per cent at its monthly board meeting today, a mortgage comparison site has predicted.
The Ratecity.com.au analysis of over 30 key economic indicators suggested that the RBA is likely to keep the cash rate on hold today “despite a volatile Australian dollar, sluggish mining transition and mounting global pressures to cut”.
Peter Arnold, data insights director at the mortgage comparison site, noted that Australia’s GDP is growing and domestically iron ore prices have “continued their winning streak”.
“Australia’s economy grew by 3.3 per cent over the year to June, notching up 100 quarters without a recession,” Mr Arnold said.
Mr Arnold said that the two things that could prompt an RBA cut would be the “sluggish mining transition and pressure from our neighbours, including Japan”, but despite this, he believes the bank is unlikely to move on rates this month.
Mr Arnold also commented that it’s been an eventful month in terms of global economics, with the US Federal Reserve choosing to leave its rates on hold in September, and the OPEC oil agreement that “could spell the end for lower petrol prices, making investors nervous”.
He added that housing is another “interesting” indicator this month.
“While prices are still high in Sydney, we’ve now seen a drop in mortgage approvals, which is a sign the market might be coming off the boil,” he said.
“It’s noteworthy because it bucks the belief that the real estate market typically heats up at this time of year.”
[Related: Rates to hold until 2017]