Reserve Bank locks in interest rate decision for March
The Reserve Bank of Australia has announced its decision on the official cash rate following its board meeting for March.
Despite some of the discussion around a predicted rate cut this year, the Reserve Bank has again decided to leave the official cash rate unchanged at 1.50 per cent for this month.
This is the 30th consecutive month that the official interest rate has been kept on hold.
St.George senior economist Janu Chan said that the RBA has recently shifted towards a more neutral stance, and acknowledged that downside risks have increased.
“It, however, is maintaining its central view that the unemployment rate will gradually fall. While the debate has shifted away from the next move being a hike, the RBA doesn’t appear to be ready to cut rates either,” Ms Chan said.
My Housing Market chief economist Dr Andrew Wilson said that the Reserve Bank is still waiting for GDP data from the December quarter to be released on 6 March.
“If there is another weaker than expected result, the odds will narrow for a pre-budget, pre-federal election cut in either April or May,” Mr Wilson said.
“Although recent wages data was reasonable, the RBA has conditioned the market to now expect a long-needed cut to attempt to revive consumption — which is now likely to also be impacted by continuing weaker housing markets.”
AMP chief economist Shane Oliver said that while things aren’t yet weak enough to push the RBA to cut, they aren’t strong enough to push it to hike either.