RBA leaves rates on hold at 1.50% at April meeting

Adam Smith 3 April 2018 NEWS

The Reserve Bank of Australia has kept the official cash rate stable at 1.50%.

The RBA met economists' expectations today when its board chose to leave the official cash rate untouched for an 18th consecutive meeting.

In the monthly finder.com.au Reserve Bank Survey, 97% of the experts polled correctly called the rate hold. However, one expert broke ranks and predicted a rate rise.

The University of Melbourne's Mark Crosby predicted the Reserve Bank would choose to hike rates at its meeting today.

"Despite The Donald's attempts to trash the world economy, the case for the RBA raising is now very strong," Crosby told finder.com.au.

But CoreLogic researcher Tim Lawless forecast that a rate rise remained a distant probability.

"With some slack in labour markets, wages growth remains close to record lows, which is keeping a lid on inflation and household consumption. National dwelling values were flat last month, however six of the eight capital cities saw dwelling values slip lower in March, albeit at a reduced rate of decline relative to other months. Despite the hold decision from the RBA, mortgage rates remain close to historic lows, particularly for owner occupiers who are paying down both their interest and principal. Investors are facing a mortgage rate premium of around 60 basis points, but relative to long term averages, their mortgage rates are low. While the RBA has flagged the next move in interest rates will be a rise, it remains likely that any hike to the cash rate is well in the future," Lawless said.

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