RBA keeps rates on hold

RBA keeps rates on hold

The Reserve Bank of Australia has elected to keep the official cash rate on hold at 2.25 per cent.


RBA governor Glenn Stevens shocked market participants in February by announcing a cut to the cash rate, taking it to its current historical low.

In notes from the RBA's March board meeting, Mr Stevens said it was "appropriate to hold interest rates steady for the time being".

BT chief economist Chris Caton correctly predicted the RBA would stay its hand in April.

"There's another cut out there, but May makes more sense [because it is] post-Consumer Price Index," Mr Caton said.

But Westpac chief economist Bill Evans, who correctly called the February cut, expected the RBA to cut again today.

"We have consistently argued that the case has already been made for a second rate cut to follow the February move," Mr Evans said.

The RBA Shadow Board, run by the Centre for Applied Macroeconomic Analysis (CAMA) at the Australian National University, unanimously recommended that rates stay 'on hold' in April.

"The Shadow Board recommends with confidence that the cash rate be held at its current level of 2.25 per cent," a statement by CAMA said.

The [Shadow] Board attaches a 64 per cent probability to this being the appropriate policy setting," it said.

Related Articles

 

RBA keeps rates on hold
investordaily image
ID logo
promoted stories

Appointments

Karen McKeown

Local Government Super appoints director

Reporter

Neil Cochrane

First State Super CEO to retire

Reporter

Pally Bargri

AMP chief risk officer for advice departs

Killian Plastow

Analysis

investordaily image

Corporate governance and advocacy in China

Therese Niklasson

Dug Higgins

The shifting LIC landscape

Dug Higgins

investordaily image

The perils of chasing niche infrastructure

Frithjof van Zyp