RBA starts 2017 with February cash rate hold
The Reserve Bank has stayed the course it charted in the latter half of 2016, leaving rates on hold.
At its meeting today, the first of 2017, the RBA board chose to leave the official cash rate on hold at 1.50%. The move was widely anticipated by economists. One hundred per cent of the experts surveyed in the finder.com.au Monthly RBA Survey predicted the Reserve Bank would leave the cash rate unchanged.
CoreLogic research head Tim Lawless said a booming housing market would make the RBA reticent to lower rates.
“With inflation consistently tracking below the RBA’s target range for almost three years, it’s likely that the heat in the housing market is one of the primary reasons why the cash rate hasn’t moved lower in an attempt to stimulate spending and push inflation higher. CoreLogic reported capital city dwelling values were 10.7% higher over the past 12 months, which is a substantially higher growth rate than the 7.4% recorded over the same period a year ago,” Kusher said.
While the Reserve Bank remained on the sidelines this month, there is a growing contingent of experts who believe the RBA’s next move will be upward. Fifty-eight per cent of the experts surveyed by finder.com.au believe the cash rate has hit its lowest point of the cycle.