The Reserve Bank of Australia has delivered the result of its monthly board meeting.
As expected, board members decided to leave the cash rate at a record-low 2 per cent, where it has been since May.
That was the result predicted by all 31 commentators surveyed by comparison website finder.com.au.
NAB chief economist Alan Oster told finder.com.au that the Reserve Bank is “waiting to see results of previous actions”, while John Caelli from ME said employment, inflation and growth data are “sufficiently benign” to allow the Reserve Bank time to reflect.
The big question is whether the next move in rates will be up or down. Six of the 31 survey respondents believe there will be another rate cut in 2015.
Board members are facing two conflicting pressures: to cut rates to stimulate the sluggish economy or to lift rates to cool the Sydney and Melbourne housing markets.
APRA, the prudential banking regulator, has moved to reduce investor lending and make mortgage lending more expensive for five key banks.
Both decisions are likely to slow price growth in Australia’s two biggest markets, and possibly increase the likelihood of another rate cut.
Find the full article here