ECONOMY

RBA Announcement: Cash Rates unchanged at 1.75 per cent

July 5 2016
Reserve Bank of Australia

Cash rate remains at 1.75% for third consecutive month.

The Reserve Bank of Australia (RBA) has left the cash rate on hold at 1.75% on Tuesday, but are there hints that rates could be cut further this year?

HIA Chief Economist, Dr Harley Dale said, “The key point from today’s Monetary Policy Decision is that the Reserve Bank of Australia (RBA) is prepared to lower rates further in 2016 if they deem such action is required.”

The decision to leave the rates untouched comes as no surprise to economists who are predicting that an August reduction to 1.5% is likely. With the fallout of Brexit and the Australian election uncertainty key factors in the predictions.

However, Capital Economics, chief economist Paul Dales said the RBA seemed more positive about the unfolding crisis in Australian politics stating, “By leaving interest rates at 1.75 per cent and not providing a very strong hint that they will be cut in August, the Reserve Bank of Australia today implied that the recent financial market volatility and political uncertainty has not altered the economic outlook.”

Source: Statement by Glenn Stevens, Governor: Monetary Policy Decision

Image credit: Kate Ausburn

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