Following back-to-back rate cuts, the RBA has decided to leave rates on hold at the already historic low rate of 1.00 per cent.
CoreLogic’s head of research Tim Lawless said he was not surprised by today’s announcement.
“The RBA’s decision to hold the cash rate at a record low of 1.00 per cent was widely expected, coming after two consecutive months where the cash rate was slashed by a total of fifty basis points,” he noted.
The researcher said today’s announcement allows the central bank to take a moment and assess the economy before making a move later, if so required.
“The pause in the cutting cycle will give the RBA time to assess the effects of earlier rate cuts on the economy and consumer spending, however there is a strong likelihood of at least one more cut later this year,” Mr Lawless continued.
Predicted future moves
Canstar’s financial expert Steve Mickenbecker has also commented on the announcement, and said he believes the RBA will hold rates for the foreseeable future unless a new warning sign appears.
“The Reserve Bank will likely hold for a couple of months, with an eagle eye for inflation and unemployment data releases. A false step on either could bring on another cut, but the central bank will be hoping that all of the stimulus will start to show in lower unemployment and higher inflation,” he stated.
Investment management company Legg Mason also predicted an unchanged rate, and noted that the banks have already passed a 40 to 45 basis point cut to rates.
Thanks in part to personal income tax cuts, it reported that consumers should have higher disposable income, and means rates won't require a change for several months.
About the author
