Interest Rates

Looks Like The RBA Will Keep The Cash Rate On Hold

By October 6, 2015 No Comments

Australia’s leading economists unanimously expect the Reserve Bank to leave the official cash rate on hold when it makes its announcement in a few hours.

Only two of the 31 leading economists polled in the Reserve Bank Survey predict the cash rate to fall in November this year, while the rest do not think the cash rate will move again in 2015.

However, there is some consensus that changes are in the pipeline, with 60% predicting a rate increase in 2016, about half predict this will occur in the last quarter of the year.

NAB chief economist Alan Oster said the non-mining sector is starting to improve, so there is no reason for the RBA to do anything yet.  “The Reserve Bank is in ‘sit and watch’ mode,” he said.

Economists were, however, divided when asked about the future of the Aussie dollar.

Of the economists that answered this section of the survey, over 75% expect the dollar to fall below US$0.65 this cycle. 

The majority of experts expect the dollar will bottom out in 2016; in fact, 44% of them believe it will happen in the first half of 2016.  Just 14% of experts think it will bottom further in the future and do not expect the Aussie dollar to plummet to its lowest point until beyond 2016.  So if you’re planning travel, keeping it local could be a great move.

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