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The Reserve Bank of Australia has delivered the decision of its monthly board meeting.
In a widely anticipated result, the RBA has today opted to hold the official cash rate at its record low of 1.50 per cent.
All 38 experts and economists surveyed by finder.com.au tipped the board members to keep the status quo unchanged, and it did.
Many of the experts said it is a matter of “so far so good”, adding there appears to be increasing scepticism from the RBA about the overall effectiveness of further rate cuts at this time.
“If there is a problem, it’s not that interest rates are too high,” said Australian Associated Press chief economist Garry Shilson-Josling.
BIS Shrapnel’s Richard Robinson said there is no need to cut rates when the unemployment rate is steady, and economic growth is also sufficient to keep it steady.
“Plus, the RBA needs to let [the] housing market cool further,” Mr Robinson said.
But many of the experts are predicting a rate cut later this year, or early next.
HIA senior economist Shane Garrett said that, given economic growth is moving in the right direction, the RBA will “wait and see” how August’s rate cut pans out before making another. More directly, Raine & Horne executive chairman Angus Raine said the rate cut will likely come before Christmas.
Both Domain senior economist Andrew Wilson and Laing+Simmons managing director Leanne Pilkington forecast that the next cut would not be before Q2, 2017.
Mr Wilson also said the RBA will be monitoring the impact of the August cut, as well as waiting for the release of next month’s inflation data.
“[It] will be also alert to recent sharp house price increases in Sydney and Melbourne,” he said.
In making her prediction, Ms Pilkington cited recent reports about the overall Australian housing market cooling and Sydney, in particular, ranking among the most at risk globally of a housing bubble.
“But the reality is much less dramatic,” she said, adding that the RBA leaving interest rates unchanged today was appropriate.
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