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Does the Melbourne Cup make an RBA rate change more likely?

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Does the Reserve Bank try and sneak announce rate rises during the nation's biggest racing event? Here's what we know.

The Reserve Bank of Australia (RBA) makes its monthly announcement about the official cash rate at 2:30pm on the first Tuesday of each month.

The Melbourne Cup, Australia's biggest horse race, happens on the first Tuesday of November at 3pm, so there's the potential for a rate change to happen every single Cup day. But how often is that actually the case?

The cynical view is that any rate rise will be announced to coincide with Melbourne Cup, because everyone's less likely to notice, what with all the booze and horses.

However, history does not bear this out.

Here's the full list of the 12 times that we've actually seen a rate change on Cup day during the modern RBA era (since 1990), and what happened:

DateChange
2 Nov 2022Increased 0.25 to 2.85%
4 Nov 2020Cut -0.15 to 0.1%
2 Nov 2011Cut -0.25 to 4.5%
3 Nov 2010Increased 0.25 to 4.75%
4 Nov 2009Increased 0.25 to 3.5%
5 Nov 2008Cut -0.75 to 5.25%
7 Nov 2007Increased 0.25 to 6.75%
8 Nov 2006Increased 0.25 to 6.25%
5 Nov 2003Increased 0.25 to 5%
3 Nov 1999Increased 0.25 to 5%
6 Nov 1996Cut -0.5 to 6.5%
6 Nov 1991Cut -1 to 8.5%

With 12 rate changes out of a possible 33 in November between 1990 and 2022, the odds of a rate change sit at just over 1 in 3. In those 12, 7 were increases and 5 were cuts - so not any notable difference there.

That figure is somewhat skewed by the 6-year continuous run of Melbourne Cup Day rate changes between 2006 and 2011.

That's what's initially likely to have created a perception that "Cup day" = "rate change", but it's not the long-term trend.

We saw the rate increase on Melbourne Cup Day in November last year, so folks with short memories might see this as a regular occurrence.

But that was actually the seventh monthly rise in a row, and it was followed by another 3. The Cup wasn't a factor at all.

Ultimately, the RBA decision is driven by a complex set of market forces and policy approaches, but the fact a horse race happens to coincide with it once a year is not one of those forces.

In Finder's latest survey of expert economists, the majority (69%) are predicting a rate rise on November 7, with a 0.25% increase the widely-agreed likely figure.

While that's suggestive, it's not an absolute guarantee. But we can be sure the decision won't have anything to do with the coincidence of a big horse race happening the same day.

So don't place any bets on the RBA making a rise (or even a cut) just because it's Cup day. The odds will not be ever in your favour.

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We updated this guide in November 2023 to include data from 2016-2022.

Image: @Tourism Australia via Canva.com

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