Uncertainty surrounding the outcome of the weekend's federal election will have "limited credit implications" for Australia's sovereign credit profile, according to Moody's Investors Service.
Moody's Investors Service vice-president, Marie Diron, said the result of the federal election will only affect Australia's sovereign credit profile if it changes broad policy priorities and the effectiveness of their implementation.
The outcome of Saturday's poll still hangs in the balance, with neither major party in a position to form a majority government.
Counting resumes today.
"Trends in Australia’s credit profile will be determined by whether fiscal objectives are effectively implemented, whether external financing conditions remain favourable and how housing market developments affect domestic growth and financial conditions," Ms Diron said.
She added that a weaker Australian dollar on service exports will support GDP growth, and suggested that economic momentum is likely to remain robust.
Commenting on the impact of the close-fought election, easyMarkets senior dealer Andrea Tjahja noted that the Australian dollar opened lower yesterday morning at US$0.7450.
Mr Tjahja said the RBA is unlikely to cut the official cash rate this afternoon, opting instead to wait a few months and re-assess the rate once it "assesses the implications of Brexit and receives second quarter CPI data".
Economists agree that the Reserve Bank is likely to remain in inflation fighting mode until December. ...