As the Reserve Bank of Australia (
RBA) is due to make its monthly cash rate call today, the consensus among Australia’s economic and financial specialists is that the rate will stay on hold at 1.5%.
All 33 experts polled in
finder.com.au’s RBA cash rate survey predicted the rate would remain steady for the 10th month in a row.
“The RBA would be happy with the current state of the economy and will await the release of Q1 GDP data before considering interest rate changes,” said
Michael Witts, treasurer at
ING Direct.
John Caelli, general manager markets at ME, said that the RBA would not cut rates due to concerns about rising house prices and household debt.
Janu Chan, senior economist at St George, agreed that the RBA was unlikely to have altered its stance.
“Housing indicators suggest cooling conditions but its concerns over risks associated with housing and household debt will remain. Employment was the other development the RBA is watching closely. On this front the fall in the unemployment rate would have been encouraging,” she said.
Of the economists polled by
finder.com.au, 80% believe the next move will be a rise. The majority of those predicting a cut expect that the rate will drop no lower than 1%.
Steve Mickenbecker, group executive of financial services at Canstar, told
Australian Broker that he also expected the rate to remain unchanged.
A future rate cut was also off the cards, he said, unless there was further evidence that economic recovery has faltered.
“If the ‘numbers’ down the track clearly evidence a slowdown, another round of out of cycle rate increases from the banks and the use of further qualitative tightening, could enable Reserve Bank to quarantine the housing market from the stimulus. This is one for the future.”
Sentiment is the same in the mortgage broking sector with over 90% of 440 brokers polled in a recent HashChing survey saying the rate will remain the same this month.
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Housing among RBA’s key economic uncertainties
