RBA makes cash rate call
Francesca Krakue Tuesday, 07 March 2017
In what was a widely-anticipated result, the RBA today decided to keep the official cash rate on hold at its record low of 1.50 per cent.
As today’s meeting approached, all 38 experts and economists from the finder.com.au RBA survey – and 97 per cent of the 300+ brokers surveyed by online mortgage platform HashChing – correctly predicted this outcome.
The Australian National University’s Dr John Hewson remarked that there was “no clear argument” for the RBA to lower further.
Darryl Gobbett of Baillieu Holst added: “[It’s] quite apparent that the RBA now is more concerned at future risks of increased household debt from lower rates than any, likely small, benefit to broader economic activity of lower rates. It is also now taking a longer-term view of meeting the 2 to 3 per cent inflation target.”
Further, underlying economic growth is weak, and there is still “too much exuberance” in the housing market for the RBA to cut rates, according to Richard Robinson from BIS Oxford Economics.