RBA quashes chance of short term rate cut
The official cash rate will remains unchanged at 1.5 per cent after the first Reserve Bank meeting of 2017.
The move does not come as a surprise to most economists who were tipping for the rate to remain unchanged.
Housing Industry Association Chief Economist, Dr Harley Dale says, “Our forecast for some time has been for no further reduction to the Official Cash Rate (OCR) in 2017.”
“Today’s statement, following the decision to keep the OCR steady at 1.50 per cent in February, signals that economic conditions would need to deteriorate markedly from where they currently sit if there were to be a further interest rate cut,” says Harley Dale.
“The RBA recognises the wide diversity in housing market conditions around the country. The RBA is relying on supervisory measures (i.e. APRA) to constrain any areas of the home lending market where they might have concern,” said Harley Dale.
“That is an appropriate approach in the current diverse housing environment and hopefully should dampen presumptuous calls from some quarters for a rate hike in 2017,” Harley Dale concluded.