The Reserve Bank of Australia has decided to keep the cash rate steady at 1.5 per cent at today’s March board meeting.
The decision to hold the RBA cash rate at 1.5 per cent falls in line with expectations held by members of the ANU Centre for Applied Macroeconomic Analysis (CAMA) RBA Shadow Board, of which around 60 per cent predicted rates would remain at their current level.
“We are going through a fairly steady period where interest rate cuts are likely not to help even though the labour market is very weak,” said ANU Emeritus Professor and CAMA RBA Shadow Board member Bob Gregory.
AMP Capital chief economist Shane Oliver said that Australia’s economic growth had “bounced back nicely” in the December quarter, reducing the need for further rate cuts.
“We now expect the RBA to leave rates on hold for the rest of the year; another rate cut is still possible but it would require another leg down in inflation to get the RBA to cut again,” he said.