RBA freeze on rates slated to continue
By
Adam Smith
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4/10/2011 4:00:00 AM
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Rates are not expected to go anywhere when the Reserve Bank meets today, representing the 11th consecutive month the RBA has remained sidelined.
A Bloomberg poll of 22 economists has indicated all economists surveyed expect the Bank to leave the official cash rate untouched at today's Board meeting. An AAP survey of 15 economists showed similar results, with economists unanimously tipping the RBA to remain in a holding pattern.
Rates seem likely to stay on hold for the immediate future as well, with only two of the 15 economists polled by the AAP signaling a rate move by the end of the year. One of the economists polled predicted a rate hike, while one predicted rates to head downward.
The most bearish of the major banks, Westpac, has sided with the majority of economists in predicting the RBA to remain steady today. However, the bank's chief economist Bill Evans has reiterated Westpac's stance that the next rate move will be downward. He said though the RBA seems unconvinced of the need for a rate cut, the series of rapid fire reductions in 2008 shows the Board's stance can change quickly to accommodate economic shocks.
"We are not despairing yet about our December call despite there only being two more meetings before our December target date. We take some heart though from how quickly the Reserve Bank can change its stance. Indeed RBA thinking has moved quite rapidly in our direction," he commented.
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