The board of the Reserve Bank of Australia has chosen to keep the official cash rate on hold at its October meeting this afternoon.
The RBA kept the cash rate steady at 1.5 per cent at its most recent meeting, the 14th consecutive month without a change.
The decision did not come as a surprise, with the ASX futures market pricing in a 100 per cent chance of 'no change' to the RBA cash rate in October.
In its October statement, the ANU-based RBA Shadow Board said the case for an increase to the cash rate in the future is building – citing favourable employment figures and an improved outlook for the Australian economy.
However, the RBA Shadow Board continued to advocate a 'wait and see' policy, attaching a 60 per cent probability to 1.5 per cent being the 'correct' monetary policy setting.
"The probabilities at longer horizons are as follows: six months out, the estimated probability that the cash rate should remain at 1.50 per cent equals 21 per cent, three percentage points lower than in September," said the statement.
"A year out, the Shadow Board members’ confidence that the cash rate should be held steady equals 15 per cent (16 per cent in September)," said the Shadow Board.
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