Rates could remain on hold for months to come as the RBA is tipped to leave the cash rate at 4.25% when it meets today.
Despite new inflation figures leaving the Reserve Bank leeway to cut rates, a survey of 24 economists by Bloomberg has shown the unanimous prediction that the RBA will not move on the official cash rate today. The TD Securities - Melbourne Institute Monthly Inflation Gauge posted only a 0.1% rise in February, leaving trimmed mean infaltion at 2.1%, at the bottom range of the bank's target band. TD Securities has claimed the result still will not provide the Reserve with enough motivation to cut rates.
"For the RBA Board meeting today, members will note that there has been next to no evidence of a 'material softening of domestic demand' in the last four weeks, the Bank’s clearly stated hurdle for further easing," TD Securities head of Asia-Pacific Research Annette Beacher said.
Beacher said employment, housing finance and exports had provided "upside surprises". And while fourth quarter GDP is expected to be flat, Beacher said an "outsize resource-led private investment boom" would remain on track into the next year.
"The easiest decision is to leave the cash rate at neutral for another month, and indeed it is increasingly likely to remain the case for several months to come," Beacher said.
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