The Reserve Bank of Australia has elected to hold the cash rate steady at 1.5 per cent at its April board meeting.
The decision falls in line with market expectations, with the ASX 30-day Interbank Cash Rates Futures pricing in a 100 per cent chance of no change for the week leading to today’s decision.
AMP Capital chief economist Shane Oliver also indicated last week that the RBA was “likely to leave rates on hold for the 20th month in a row”, surpassing the previous record of 19 months without change between January 1995 and July 1996.
“High business confidence, strong jobs growth and the RBA's own growth and inflation forecasts argue against a rate cut, but risks around consumer spending, weak wages growth and inflation, the slowing Sydney and Melbourne property markets and the still too high Australian dollar argue against a rate hike,” he said.
“We don’t see the RBA commencing a tightening cycle until first half 2019 and an emerging further tightening in bank lending standards around home borrower income and expenses, along with any flow through to higher mortgage rates from the recent increase in short term funding costs could delay this.”
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 16 Aug 2018Faith in adviser ethics fallsBy Reporter
- 15 Aug 2018CFS required no proof for service fees, RC hearsBy Killian Plastow
- 15 Aug 2018AFA reveals Female Excellence in Advice finalistsBy Reporter
- 15 Aug 2018CFS ‘retained’ adviser commissions: RCBy Killian Plastow and Tim Stewart
- 15 Aug 2018Suncorp urged advisers to maintain commissionsBy Jessica Yun
- 15 Aug 2018Hostplus spent $260,000 on tennis ticketsBy Tim Stewart
- view all