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The Reserve Bank of Australia has announced the result of its monthly board meeting.
The central bank confirmed market predictions by leaving the official cash rate at a record-low 2.5 per cent for the 15th consecutive month.
All 33 experts surveyed by comparison website finder.com.au had forecast that the cash rate would remain on hold.
Bank of Sydney’s deputy chief executive, Steven Pambris, told finder.com.au that the economy was too weak for rates to rise while the housing market was too hot for rates to fall.
CommSec economist Savanth Sebastian said there was no evidence to suggest that the Reserve Bank’s board members had changed their minds about the economy.
“The board believes that the cash rate is at the right level to support the economy and keep inflationary pressures in check,” he said.
Heritage Bank chief operating officer Paul Williams said the Reserve Bank appears happy to leave the cash rate at 2.5 per cent while the economy tries to build momentum.
“The RBA will be keeping an eye on the trends in unemployment, inflation levels, developments in key offshore economies and geo-political tensions in the Middle East and Europe,” he said.
All but three of the experts surveyed by finder.com.au expect the cash rate to start rising in 2015.
Two of those said the rate rise would come in 2016, while Domain Group senior economist Andrew Wilson said the next move in rates would be a fall in the first quarter of 2015.
Dr Wilson said although the Reserve Bank still had to weigh up “mixed signals” in the economy, the negative signs now outweighed the positive.
“The Reserve Bank is waiting for crystallisation of the general economic climate – but house prices are now falling, inflation is low, unemployment and the dollar are still too high, the share market is weaker and there are rising concerns over the global economic outlook,” he said.
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