No surprises as RBA holds rates steady

Adam Smith 4 October 2016

RBA October 2016 decisionThe Reserve Bank has again chosen to leave the cash rate on hold.

At its monthly board meeting today, the first presided over by new RBA governor Philip Lowe, the Reserve Bank chose to leave the official cash rate on hold at 1.50%. The decision came as little surprise to experts, who had tipped the RBA to remain sidelined while it waits for new inflation data.

100% of the rate experts polled in’s monthly Reserve Bank Survey forecast the RBA to leave the cash rate untouched in October, though one-third of the experts surveyed said they expected another rate cut before the end of 2016.

Eight (24%) of the experts polled by expected the RBA to make its next cut in November, while 9% forecast a cut in December. Sixty-nine per cent of experts surveyed believe the Reserve's next cut could be the last in its current easing cycle, predicting the official cash rate will find its floor at 1.25%.

The RBA is expected to await further economic data before making its next cash rate move. Third quarter inflation data is due at the end of October, which could inform the Reserve Bank’s decision at its November meeting.

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