The RBA is due to make its monthly monetary policy announcement tomorrow but whether rates will fall or hold is anyone’s guess.
A survey of economists by AAP today highlighted the uncertainty surrounding this month’s rate decision.
Ten out of 19 economists surveyed said they expected a reduction tomorrow but nine said they expected the cash rate to remain on hold.
The RBA last reduced the cash rate when it met in February. At its meeting in March the Bank decided it would be better to allow current policy measures time to filter through to the market.
While the Bank did not rule out any further reductions it gave little indication of just when they might take place.
“Members believed this [decision to pause on rates] would leave adequate flexibility for policy at future meetings,” the Bank’s March meeting minutes said.
A straw poll conducted by Mortgage Business after February’s rate cut showed that 47 per cent of brokers believed further reductions would be necessary for borrowing activity to increase sufficiently.
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