No change predicted for RBA cash rate
It’s most likely that the RBA will keep the cash rate on hold at 2.00 per cent at tomorrow’s monthly board meeting.
All 31 of finder.com.au’s panel of experts have predicted there will be no change to the RBA cash rate in August, with 55 per cent predicting interest rates will begin to rise in 2016.
The tightening of investor lending has taken pressure off the RBA to make further cuts according to LJ Hooker chief executive Grant Harrod.
“Some heat is expected to come out of the Sydney property market over the next few months as banks begin to tighten lending to investors. This will come as a relief to the Reserve Bank,” Mr Harrod said.
“This, combined with a softer Australian dollar, gives the Reserve Bank time to take stock of market movements and wait until further data provides a clearer indication of how the economy is tracking.”
ING Direct treasurer Michael Witts agreed saying “the exchange rate has started to move lower and this will lessen the pressure for further Reserve Bank cuts for the moment as broader sectors of the economy benefit from the lower exchange rate.”
Peter Boehm from onthehouse.com.au said he would be ‘very surprised’ to see movement in either direction from the RBA in August.
“It’s too early to start increasing rates and I cannot see the economic or financial justification for further rate cuts at this point. I think (hope) we'll see some interest rate stability over the coming months,” Mr Boehm said.
Online bookmaker CrownBet said the odds for the interest rate to stay the same are $1.03, meaning betters would receive just three cents for every dollar they bet.
A decrease of 1 to 25 basis points would win you $10 for every dollar bet and an increase of 1 to 25 basis points would win you $51 for every dollar bet.