Cash rate to remain on hold, for now

by Julia Corderoy07 Apr 2015
The cash rate is likely to stay on hold when the Reserve Bank meets today, however economists are expecting another official cash rate cut by June.

According to the Reserve Bank Survey of 42 economists and industry analysts, 76% are expecting the cash rate to remain at 2.25% when the RBA makes its announcement this afternoon.

However, 74% are expecting the cash rate to fall by June this year, with another 21% forecasting a cut between July and September this year. Just two analysts (5%) are expecting the cash rate to be dropped today as well as again later in the year.

The four major banks are split down the middle on their cash rate forecast for today’s announcement, with ANZ and Westpac expecting a cut while CBA and NAB are expecting the cash rate to remain on hold. 

“The Reserve Bank has signalled they're likely to ease policy further. We still haven't seen any evidence of a sustained pick-up in non-mining business investment and the Australian dollar has been a bit high in previous weeks,” ANZ chief economist, Warren Hogan said.

However, CBA chief economist Michael Blythe says the economy is still “assessing impact of the February cut and the Australian dollar direction”.