Reserve Bank decides on cash rate

Board members decided to leave the official cash rate at the record-low 1.75 per cent following a 25 basis point cut in May.

Thirty of the 31 economists and commentators surveyed by comparison website finder.com.au predicted no change to the cash rate today.

The majority of respondents cited the federal election, Brexit and the upcoming CPI figures as contributing factors to the RBA’s wait-and-see approach.

AMP Capital chief economist Shane Oliver said the Reserve Bank expressed comfort with current monetary settings after the June meeting and “it’s likely in wait-and-see mode regarding the risks posed by Brexit”.

Greater Bank CEO Scott Morgan said there is nothing in recent data to suggest further rate cuts are needed.

“There is no need for a knee jerk response to Brexit or other issues,” Mr Morgan said.

“I think the RBA will want the election to be out of the way and [want] some time to look at how the economy and markets are responding to the previous cut.”

Moody’s Analytics’ Emily Dabbs said monthly indicators show the economy is continuing to perform well.

“The impact of Brexit on Australian markets is relatively minor. The central bank will wait until the CPI data release to assess inflation pressures,” Ms Dabbs said.

Meanwhile, 24 per cent of the experts surveyed said the cash rate would fall to 1.25 per cent before an upturn.