RBA to leave rates unchanged today

Experts have come to a unanimous agreement that the official cash rate will be left on hold at the Reserve Bank of Australia's monthly board meeting today.

Thirty-one economists and commentators surveyed by comparison website finder.com.au expect interest rates will remain at the record-low two per cent.

Many of those surveyed said there is not enough reason to move the official cash rate from where it currently sits.

“Recent Reserve Bank commentary suggests a degree of comfort with the current level for the cash rate and while it retains an easing bias, not enough has changed to suggest it is about to act on it,” AMP Capital chief economist Shane Oliver said.

“It’s basically in wait and see mode regarding the jobs market and the potential impact of global financial turmoil.”

Forty-five per cent of experts surveyed believe Australia is at the bottom of the interest rate cycle, while 26 per cent are forecasting one further rate cut to 1.75 per cent.

“The Reserve Bank remains open to the possibility of reducing interest rates, but is only likely to do so should the economic situation internationally deteriorate further,” Housing Industry Association senior economist Shane Garrett said.

Twenty-three per cent of those surveyed believe a rate rise is on the cards in 2016, while 48 per cent say it won’t happen until next year.

“If jobs growth continues in line with its recent trend, talk of rate hikes will be growing louder over the second half of this year,” Australian Associated Press chief economist Garry Shilson-Josling said.

Thirty-nine per cent expect banks to quietly change interest rates out of cycle this year, while 16 per cent said this would be unlikely.

[Related: Westpac reveals new rates]

 

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Emma Ryan

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