RBA keeps cash rate on hold

RBA keeps cash rate on hold

The Reserve Bank of Australia has kept the official cash rate on hold at 1.5 per cent at its final monetary policy meeting of the year.


As widely predicted, the RBA has elected to keep the official cash rate at 1.5 per cent.

The result of the meeting is also in line with the futures market, which tracks the movement in the RBA cash rate.

As at 5 December, the ASX 30 Day Interbank Cash Rate Futures December 2016 contract was trading at 98.505, indicating a 2 per cent expectation of an interest rate decrease to 1.25 per cent.

QIC chief economist Matthew Peter was one of a swathe of economists who correctly called the RBA's decision to hold rates.

However, RBA governor Philip Lowe finds himself in a "very constrained space", Mr Peter said.

"Tepid economic activity, lacklustre business investment combined with a weak labour market and low wage growth call for lower interest rates," he said.

"However, an overheated housing market, an improving global economy, rising terms of trade and moderating currency suggest rates should remain on hold or even rise.

"Caught between these countervailing forces, the RBA will remain on hold at their coming December meeting."

 

 

RBA keeps cash rate on hold
investordaily image
ID logo
promoted stories

Appointments

investordaily image

AMP names incoming chief risk officer

Jessica Yun

investordaily image

Antares Equities hires new director

Staff Reporter

Brad Fox

Former AFA CEO appointed to boutique board

Staff Reporter

Analysis

investordaily image

Warning lights flashing on Aussie equities

Roy Maslen

investordaily image

What’s in store for the economy in 2018?

Frank Uhlenbruch

ST Wong

Busting common passive investing myths

ST Wong