RBA makes cash rate call for August - August 2018
The Reserve Bank of Australia has announced its decision on the official cash rate after concluding its monthly board meeting.
After 23 consecutive months of keeping interest rates on hold, the RBA board has again decided to keep the cash rate unchanged at 1.5 per cent.
All 31 of the experts and industry commentators on finder.com.au predicted that rates would remain on hold again this month.
St. George Bank senior economist Josephine Horton expects the RBA will continue to keep the cash rate on hold for a longer period, given the current conditions.
“Economic growth is solid, business conditions are elevated and jobs growth is strong. There are risks to the global economy, including trade concerns and the domestic economy, including housing,” she explained.
“There are downside risks emanating from a tightening in lending standards and recent upward pressure on wholesale funding costs, as recently highlighted by the RBA. This suggests the RBA will leave interest rates on hold for an extended period.”
AMP chief economist Shane Oliver said while growth has picked up a bit and the RBA is optimistic, inflation and wages remain too low, property prices are falling in Sydney and Melbourne, the housing construction cycle has peaked and uncertainty remains around the outlook for consumer spending.
“So it’s way too early to hike, but hard to mount a case for a cut either right now. So best to remain on hold,” he said.
ABC Bullion chief economist Jordan Eliseo said the RBA's view on monetary policy is clearly changing, with a more dovish tone at the very least pushing back the timeframe for rate hikes, if not already opening the door to an eventual rate cut.
“Growth figures and employment levels are still reasonable though, so they'll continue to take a wait and see approach for now,” said Mr Eliseo.
