Borrow
Record low remains for the next 3 years
Australia will remain in a low-growth, low-inflation economy, leaving rates untouched for the next three years, modelling from the central bank shows.
Record low remains for the next 3 years
Australia will remain in a low-growth, low-inflation economy, leaving rates untouched for the next three years, modelling from the central bank shows.
During his monthly statement, RBA governor Philip Lowe reiterated that the central bank would not consider changes to the cash rate until its long-term targets of unemployment and inflation were met.
“The board will not increase the cash rate target until progress is being made towards full employment, and it is confident that inflation will be sustainably within the 2–3 per cent target band,” he said.
The RBA is expecting inflation to remain below 2 per cent over the next few years and is expecting the unemployment rate to hit 10 per cent in the coming months before ending 2020 at 7 per cent.
As a result, AMP chief economist Shane Oliver has predicted rates will remain lower for longer.
“For those focused on the RBA’s cash rate, the next few years are likely to be pretty boring,” he said.
“The cash rate is at the RBA’s long-stated lower bound and there is no value in taking it negative, so it won’t be cut any further.”
However, governor Lowe said the RBA remains prepared to employ alternative monetary policy measures to support the economy.
“[The central bank] will maintain its efforts to keep funding costs low in Australia and credit available to households and businesses,” he said.
“The board is committed to do what it can to support jobs, incomes and businesses during this difficult period and to make sure that Australia is well placed for the expected recovery.”
RELATED ARTICLES
About the author
About the author
Banking
AMP Bank GO adds business overdraft to mobile platform for small businesses
AMP Bank has launched a business overdraft feature within its mobile-first banking platform AMP Bank GO as cash flow concerns continue to affect small business owners across Australia. Read more
Banking
Bendigo Bank named most trusted bank in Australia for 10th consecutive quarter
Bendigo Bank has retained its position as Australia's most trusted bank, according to the latest trust rankings released by research firm Roy Morgan. Read more
Banking
Account-to-account and instant payments set to reshape global payments landscape
A new report from Capgemini predicts that instant payments will account for 22% of all non-cash transactions globally by 2028, signaling a major shift in the payments industry. Read more
Banking
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions. Read more
Banking
Bendigo Bank economist forecasts stable rates for 2024, cuts in 2025
Bendigo Bank's Chief Economist David Robertson is maintaining his prediction that the Reserve Bank of Australia (RBA) will keep interest rates unchanged throughout 2024, with cuts likely to begin in ...Read more
Banking
Hawkish central bank expectations dampen market sentiment, boosting dollar
Recent economic data and central bank communications have dampened the market's appetite for risk assets, leading to a stronger US dollar and a pullback in commodities and equities, according to Ipek ...Read more
Banking
Bank of England expected to provide guidance on future rate cuts at today's MPC meeting
European and UK stocks are outperforming their US counterparts due to a combination of factors, including high valuations in the US, strong corporate earnings from European companies, and expectations ...Read more
Banking
Investors advised to prepare for central bank policy divergence, says deVere CEO
The Bank of England, European Central Bank (ECB), and US Federal Reserve are set to take different paths in their monetary policies, which will significantly impact investors around the world, ...Read more
Banking
AMP Bank GO adds business overdraft to mobile platform for small businesses
AMP Bank has launched a business overdraft feature within its mobile-first banking platform AMP Bank GO as cash flow concerns continue to affect small business owners across Australia. Read more
Banking
Bendigo Bank named most trusted bank in Australia for 10th consecutive quarter
Bendigo Bank has retained its position as Australia's most trusted bank, according to the latest trust rankings released by research firm Roy Morgan. Read more
Banking
Account-to-account and instant payments set to reshape global payments landscape
A new report from Capgemini predicts that instant payments will account for 22% of all non-cash transactions globally by 2028, signaling a major shift in the payments industry. Read more
Banking
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions. Read more
Banking
Bendigo Bank economist forecasts stable rates for 2024, cuts in 2025
Bendigo Bank's Chief Economist David Robertson is maintaining his prediction that the Reserve Bank of Australia (RBA) will keep interest rates unchanged throughout 2024, with cuts likely to begin in ...Read more
Banking
Hawkish central bank expectations dampen market sentiment, boosting dollar
Recent economic data and central bank communications have dampened the market's appetite for risk assets, leading to a stronger US dollar and a pullback in commodities and equities, according to Ipek ...Read more
Banking
Bank of England expected to provide guidance on future rate cuts at today's MPC meeting
European and UK stocks are outperforming their US counterparts due to a combination of factors, including high valuations in the US, strong corporate earnings from European companies, and expectations ...Read more
Banking
Investors advised to prepare for central bank policy divergence, says deVere CEO
The Bank of England, European Central Bank (ECB), and US Federal Reserve are set to take different paths in their monetary policies, which will significantly impact investors around the world, ...Read more
